Euro weakens ahead of ECB meeting

Market sentiment picked up on in Thursday’s Asian session after more upbeat data out of China. Inflation in the world’s second largest economy came in stronger than forecast in last month. The consumer-price index rose 2.3 percent last in February from a year earlier, up from January’s 1.8 percent.

The dollar gained 0.4 percent to 113.26 yen on the news as the safe haven Japanese currency lost some demand due to fading risk aversion.

All eyes are now turning to an important event later today – the European Central Bank policy meeting. The Bank is expected to announce more policy easing measures, including a cut in the deposit rate by 10 basis points to -0.40 percent and an increase in the current bond buying programme. There is also a possibly introduce tiered interest rates in an effort to boost inflation in the Eurozone.

In anticipation of the ECB meeting, the euro has come under bearish pressure. EUR/USD was down 0.2 percent at $1.0977. But against the broadly softer yen today, the single currency clawed back ground against the yen, rising 0.2 percent to 124.86.

Meanwhile another central bank that was in focus was the Reserve Bank of New Zealand which made a surprise rate cut overnight, resulting in a huge move down in the kiwi. The RBNZ cut its official cash rate by 25 basis points to a record low 2.25 percent.

The New Zealand dollar tumbled more than a cent against the US dollar after the RBNZ’s announcement. It also signaled at least one more rate cut to come. NZD/USD dropped to a one-week low of $0.6618, well below yesterday’s high of $0.6809.

With oil prices rising to two-month highs, this helped the oil-linked Canadian currency gain ground versus the greenback. USD/CAD last traded around $1.3235.

The post Euro weakens ahead of ECB meeting appeared first on FXTM Blog.

Source:: Euro weakens ahead of ECB meeting

About the Author
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC. Our mission is to maximize the value our clients derive from their most precious commodity, "Time"! By offering advanced and innovative services, optimal customer care and perpetual devotion to our clients, we will ensure that their individual needs are always met as markets continue to evolve over time. Visit ForexTime to learn more [space height="20"] [social type="facebook"][/social] [social type="twitter"][/social] [social type="google-plus"][/social] [social type="youtube"][/social]

Related Posts

Leave a Reply