Euro Mixed After ECB Minutes
July 11 2019 - 4:51AM
RTTF2
The euro was trading mixed against its major opponents in the
European session on Thursday, after minutes from the European
Central Bank's recent monetary policy meeting showed that Governing
Council was determined to ease monetary policy further in case of
adverse contingencies through restarting asset purchase program and
lowering policy rates.
In the light of low inflation, there was broad agreement that it
was important for the Governing Council to demonstrate its
determination to act by adjusting its monetary policy stance at the
current meeting, and to further prepare for adverse contingencies
in the period ahead, the minutes from the monetary policy meeting
held on June 5 and 6 showed.
"Considering the outlook and risks for the external environment,
members highlighted the ongoing weakness in global trade, and
concern was expressed about more pervasive and prolonged
uncertainties in the external environment and their adverse impact
on the global growth outlook for some time to come."
With regard to the weakening of the economic outlook and the
muted inflation developments, the extension of the calendar element
of the forward guidance on interest rates was widely seen as
appropriate, it said.
Consequently, the expected timing of an ECB policy rate
"lift-off" had shifted out substantially, with some
market-perceived chance of rate cuts, it added.
Final data from Destatis showed that Germany's consumer price
inflation accelerated as initially estimated in June.
Consumer prices advanced 1.6 percent year-on-year in June,
faster than the 1.4 percent increase in May.
The currency showed mixed trading against its major counterparts
in the Asian session. While it dropped versus the yen and the
franc, it was steady against the pound. Against the greenback, it
rose.
The euro bounced off to 121.95 against the yen and held steady
thereafter. This follows an early 3-day low of 121.62 hit at 11:00
pm ET. The euro-yen pair was valued at 122.02 when it ended deals
on Thursday.
Data from the Ministry of Economy, Trade and Industry showed
that Japan's tertiary activity declined in May after rebounding in
the previous month.
The tertiary activity index fell 0.2 percent month-on-month in
May, reversing a 0.8 percent rise in April. Economists had expected
a 0.1 fall.
After rising to a 6-day high of 1.1281 against the greenback at
11:15 pm ET, the euro eased slightly around 6:00 am ET and moved
sideways since then. At yesterday's close, the pair was worth
1.1251.
The euro slipped to a 2-day low of 0.8969 against the pound from
yesterday's closing value of 0.8995. The euro is seen finding
support around the 0.88 region.
Data from the Royal Institution of Chartered Surveyors showed
that UK house price balance improved unexpectedly in June as buyers
for property increased for the first time since late 2006.
The house price balance rose to -1 percent in June from -9
percent in the previous month. The score was forecast to fall to
-12 percent.
The euro that closed Wednesday's trading at 1.1131 against the
franc depreciated to near a 2-week low of 1.1105. On the downside,
1.09 is possibly seen as the next support level for the euro.
Looking ahead, U.S. monthly budget statement for June is due in
the New York session.
Federal Reserve Chairman Jerome Powell will testify on the
Semiannual Monetary Policy Report before the Senate Banking
Committee in Washington DC at 10:00 am ET.
At 1:30 pm ET, Federal Reserve Governor Randal Quarles will
deliver a speech about financial regulation and monetary policy at
an event hosted by the Bipartisan Policy Center in Washington
DC.
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