News Column

Euro Mixed After ECB Interest Rate Announcement

July 3, 2014



CANBERA (Alliance News) - The euro came in mixed against the other major currencies in European deals on Thursday after the European Central Bank left its interest rates unchanged, after reducing them in June.

The Governing Council, led by President Mario Draghi, held the refinancing rate at a record low 0.15%, following its policy meeting in Frankfurt.

The bank retained the deposit rate at -0.10%. In June, the bank slashed the rate from zero to negative, which in effect would charge Eurozone banks for parking excess funds at the ECB, a first for a leading central bank.

Draghi is set hold his customary post-decision press conference at 8.30 am ET, wherein he is expected to shed light on the impact of June measures

The euro area private sector growth eased for the second consecutive month in June as estimated to its lowest in the year so far, survey data from Markit Economics showed.

The final Markit composite output index fell to 52.8 in June from 53.5 in May. The score was unchanged from the flash estimate. Likewise, the services Purchasing Managers' Index dropped to 52.8, in line with flash reading, from 53.2 in May.

The euro moved sideways against the US dollar after recovering to 1.3663,from an early low of 1.3644.

The euro rose back against the pound with pair trading at 0.7967, after falling to 0.7953 in early deals. If the euro continues its uptrend, it may face resistance around the 0.804 zone.

UK service sector activity continued to strengthen in June, albeit at a slower rate than expected, results of a survey by Markit Economics and the Chartered Institute of Purchasing and Supply revealed.

The CIPS/Markit services PMI came in at 57.7 in June, indicating strong growth though the index marked a three-month low. This was less than the score of 58.3 expected by economists and the three-month low of 58.6 in May.

The euro rose to a 2-day high of 1.2147 against the franc from Wednesday's closing value of 1.2139. Continuation of uptrend may take the euro to a resistance around the 1.22 zone.

Having improved to a new 3-week high of 139.27 against the yen at 3:55 am ET, the euro pulled back slightly and was valued at 139.09. The pair was quoted at 138.97 when it ended deals on Wednesday.

Japan's service sector activity declined further in June, results of a survey by Markit Economics showed.

The Markit Japan Services PMI edged down to 49.0 in June from 49.3 in May, signaling contraction for the third consecutive month. The decrease in service sector output was driven by the recent increase in sales tax, the survey showed.

The euro eased back to 1.4549 against the aussie, coming off from more than a 3-week high of 1.4589 hit 3:10 am ET. The euro-aussie pair ended yesterday's trading at 1.4460.

The euro moved away from an early high of 1.5609 against the NZ dollar and traded steadily in subsequent deals. The euro-kiwi pair was quoted at 1.5557 at Wednesday's close.

After rising to 1.4572 against the loonie at 9:00 pm ET, the euro retreated to 1.4530. On the downside, 1.44 is seen as next downside target level for the euro.

Looking ahead, the US jobs data for June, weekly jobless claims for the week ended June 28, trade data for May and ISM non-manufacturing composite index for June, as well as Canada trade data for May are due shortly.



For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Alliance News


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters