Euro Eases After Soft German, Eurozone Factory PMIs; ECB Decision Due
24 Octubre 2019 - 12:53AM
RTTF2
The euro retreated from its early highs against its most major
counterparts in early European deals on Thursday, as manufacturing
PMIs from Germany and Eurozone fell short of consensus estimates in
October and traders await European Central Bank's rate decision and
President Draghi's final press conference due later in the day.
Survey data from IHS Markit showed that Eurozone manufacturing
PMI remained unchanged at 45.7 in October, while it was forecast to
climb to 46.0.
The flash composite output index rose slightly to 50.2 in
October from 50.1 in September. The score was forecast to improve
to 50.3.
In Germany, the factory PMI came in at 41.9, compared to
forecasts of 42.0. That followed a reading of 41.7 in
September.
The composite output index was 48.6 in October, little-changed
from September's near seven-year low of 48.5 and below the forecast
of 48.8.
The ECB decision announcement is due at 7.45 am ET, followed by
customary post-decision press conference from Draghi at 8.30 am ET.
The bank is widely expected to leave interest rates and stimulus
measures unchanged, and reaffirm its forward guidance.
The main refinancing rate is currently at 0.00 percent, the
marginal lending rate is at 0.25 percent and the deposit rate is at
-0.50 percent.
Draghi is expected to defend last month's decision to restart
the bond purchase program despite division in the Governing
Council.
The currency held steady against its major counterparts in the
Asian session.
The euro pulled back to 1.1124 against the greenback, from a
3-day high of 1.1163 hit at 3:15 am ET. The euro is seen finding
support around the 1.09 region.
After rising to a 3-day high of 121.39 at 3:15 am ET, the euro
moved off to 120.88 against the yen. The next likely support for
the euro is seen around the 118.00 level.
Final data from the Cabinet Office showed that Japan's leading
index fell less than estimated in August but remained at the lowest
level in nearly ten years in August.
The leading index, which measures the future economic activity,
fell to 91.9 in August from 93.7 in July. The initial estimate was
91.7.
The euro eased off to 1.1022 versus the Swiss franc, following a
1-week high of 1.1042 seen at 3:15 am ET. The euro is poised to
challenge support around the 1.09 level.
The euro reversed from an early 2-day high of 1.4590 against the
loonie, falling back to 1.4554. On the downside, 1.42 is possibly
seen as the next support level for the euro.
In contrast, the euro rebounded to 0.8646 against the pound,
from a 2-day low of 0.8600 it touched at 3:00 am ET. Next key
resistance for the euro is likely seen around the 0.88 level.
Looking ahead, at 7:45 am ET, the European central Bank
announces its interest rate decision. Economists expect the main
refinancing rate to be kept unchanged at 0.00 percent and the
marginal lending rate at 0.25 percent.
The U.S. weekly jobless claims for the week ended October 19,
durable goods orders and new home sales for September will be
featured in the New York session.
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