Kantox currency update: euro recovery stalls awaiting the ECB
The recent euro uptrend lost steam on Wednesday, with the investors focusing on the ECB’s monetary policy decision, due at 12:45 GMT today, for more info about the Bank’s plans to unwind its quantitative easing program.
The U.S. dollar trimmed losses during the day, buoyed by a better then expected ADP employment report and the White House’s announcement of tariff exemptions to Canada and Mexico, that have eased market concerns about the consequences of Trump’s protectionist agenda.
EUR/USD recovery stalls below 1.2450. The euro recovery from last week lows at 1.2155 was capped on Wednesday at 1.2450 area, although the pair has remained steady at three-week highs above 1.2400 during the last sessions. At London market opening times, the EUR/USD is trading at 1.2410.
GBP/USD: testing levels above 1.3900. The sterling advanced on Wednesday for the fifth consecutive day, although the pair has remained below Tuesday highs, at 1.3930, weighed by Brexit news, especially after EU’s rejection to grant the UK a special deal for financial services. At London market opening times, the GBP/USD is trading at 1.3905.
USD/JPY bounces up from 105.50 area. The dollar went back and forth on Wednesday, dropping to 105.45, before picking up following better than expected U.S. ADP employment figures, and return above 106.00. At London market opening times, the USD/JPY is trading at 105.95.
In the Calendar Today
At 12:45 GMT all eyes will be on the ECB monetary policy decision. The bank is widely expected to leave its benchmark rate at 0%, but the focus will be on the ensuing monetary policy statement and the press release where Draghi is highly likely to be questioned about ECB’s plans to remove the monetary stimulus program. Any hints pointing to QE exit in September would have strongly positive impact on the euro.
12:45 GMT ECB: Monetary Policy Decision (YoY) (Q4)
Previous: 0% Expected: 0%
13:30 GMT ECB: Monetary Policy statement and press release