Kantox currency update: the euro advances with the ECB in focus
The euro continued escalating positions on Wednesday, buoyed by increasing speculation about the possibility that the European Central Bank might signal the end of its bonds purchasing program at next week’s meeting.
At the same time, the new Italian government seems to have moderated his Eurosceptic discourse over the last days, which is also contributing to boost market sentiment and ease bearish pressure on the euro.
EUR/USD extends recovery into the 1.1800 area. The euro advanced sharply on Wednesday on hopes that the ECB would start normalising its monetary policy and extended its rebound from last week’s lows near 1.1500 to reach levels right above 1.1800 so far. As at London market opening times, the EUR/USD is trading at 1.1735.
GBP/USD: advances further beyond 1.3400. The sterling is following EURUSD price action and remains bid against the dollar, favoured by a context of brighter market sentiment, and returning to levels above 1.3400 after having bounced at 1.3200 lows last week. As at London market opening times, the GBP/USD is trading at 1.3445.
USD/JPY attempting to consolidate above 110.00. The dollar extended gains on Wednesday, with the yen weighed in a context of increasing risk aversion, to return above 110.00, although the pair seems to have run into resistance at 110.25 and is trying to defend the 110.00 level. As at London market opening times, the USD/JPY is trading at 110.05.
In the Calendar Today
At 09:00 GMT Eurostat will release the final reading of the Eurozone Gross Domestic Product of the first quarter. According to previous estimations, European economy grew at a 2.5% annual pace in the first three months of the year. Only an explicit revision of these figures would have a relevant impact on the euro.
09:30 GMT EZ: Gross Domestic Product (YoY) (Q1)
Previous: 2.5% Expected: 2.5%