Euro Higher After ECB Decision
19 Enero 2017 - 2:23AM
RTTF2
The euro was trading higher against its most major counterparts
in the European session on Thursday, after the European Central
Bank left its key interest rates unchanged for a seventh
consecutive policy session and maintained its asset purchases,
confirming that they will continue at a reduced pace till the end
of this year.
The Governing Council, led by ECB President Mario Draghi, left
all its three interest rates unchanged. The main refi rate was kept
unchanged at a record low zero percent and the deposit rate at
-0.40 percent. The marginal lending facility rate was held at 0.25
percent.
The bank also retained its asset purchases of EUR 80 billion a
month till March and to continue them at a reduced size of EUR 60
billion a month till December 2017. Asset purchases can be extended
beyond December if necessary, until the Governing Council sees a
sustained adjustment in the path of inflation consistent with its
inflation aim, the ECB added.
"If the outlook becomes less favorable, or if financial
conditions become inconsistent with further progress towards a
sustained adjustment in the path of inflation, the Governing
Council stands ready to increase the programme in terms of size
and/or duration," the central bank said.
Draghi is set to begin his customary post-decision press
conference in Frankfurt at 8.30 am ET, with investors awaiting more
clues about the assessment of the economy and direction of policy
in the months ahead.
In other economic news, data from the European Central Bank
showed that the euro area current account surplus reached a record
high level in November.
The seasonally adjusted current account surplus rose to EUR 36.1
billion in November from EUR 28.3 billion in October.
The euro showed mixed performance in the Asian session. While
the euro held steady against the greenback and the pound, it fell
against the Swiss franc. Against the yen, it rose.
The euro climbed to 1.0729 against the Swiss franc, from a
2-week low of 1.0698 hit at the commencement of today's trading.
The euro-franc pair may find resistance around the 1.09 zone.
Data from the the Federal Statistical Office showed that
Switzerland's producer and import prices remained unchanged at the
end of the year.
Producer and import prices held steady on a yearly basis in
December, confounding expectations for an increase of 0.1
percent.
The euro advanced to a 6-day high of 122.35 against the Japanese
yen shortly before the announcement and held steady thereafter. At
Wednesday's close, the pair was valued at 121.84. If the euro
extends gain, it may locate resistance around the 125.00 level.
The 19-nation currency spiked up to 1.4169 against the loonie,
its strongest since December 30. The euro-loonie pair finished
Wednesday's trading at 1.4104. Continuation of the euro's uptrend
may see it challenging resistance around the 1.43 mark.
The single currency, having fallen to a 2-day low of 1.0622
against the greenback at 7:45 pm ET, reversed direction and was
trading higher at 1.0675. The euro is poised to locate resistance
around the 1.08 region.
On the flip side, the euro reached as low as 0.8636 against the
pound at 6:10 am ET and traded steadily since then. The pair was
worth 0.8668 when it finished Wednesday's trading.
Looking ahead, U.S. building permits and housing starts for
December, U.S. weekly jobless claims for the week ended January 14,
Federal Reserve Bank of Philadelphia manufacturing index for
January, U.S. crude oil inventories data and Canada manufacturing
sales data for November are set to be published shortly.
At 3:45 pm ET, San Francisco Fed President John Williams is
expected to speak before the Solano Economic Development
Corporation Annual Luncheon Meeting, Fairfield, United States.
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