Euro Mixed Ahead Of ECB Monetary Policy Decision

06:14, 2nd October 2014

(RTTNews) - The euro showed mixed trading against the other major currencies in the European session on Thursday ahead of the monetary policy statement by the European Central Bank, due shortly.

After the rate cut in the previous month, the central bank is expected to maintain its refinancing rate and deposit rate at 0.05 percent and -0.2 percent, respectively.

The decision is followed by a customary post-meeting press conference of President Mario Draghi at 8:30 am ET.

The ECB plans to buy asset-backed securities, or ABS, to boost the market for such credit and supporting lending to the small and medium-sized firms that form the backbone of the euro zone economy.

Some expect that he could speak about the the plans to buy government bonds in a Federal Reserve-style quantitative easing package.

Meanwhile, data from easing package showed that Eurozone's producer prices declined at a faster than expected rate in August. Producer prices dropped 1.4 percent year-over-year in August, which was more than the 1.2 percent fall expected by economists. In July, producer prices had decreased at a revised 1.3 percent.

In the Asian trading, the euro showed mixed trading against the other major currencies.

The euro rose to a 3-day high of 0.7818 against the pound in the European trading, from an early low of 0.7789. If the euro extends its uptrend, it is likely to find resistance around the 0.79 area.

Data from Markit Economics and the Chartered Institute of Purchasing & Supply showed that U.K 's construction activity growth quickened unexpectedly in September. The Markit/CIPS construction purchasing managers' index, or PMI, edged up to 64.2 in September from 64 in August. Economists had expected the index to decrease to 63.5.

Pulling away from an early 2-day high of 1.2673 against the U.S. dollar, the euro fell slightly to 1.2613 and held steady thereafter.

Against the yen, the euro fell to more than a 3-week low of 136.95, from an early high of 137.71, and held steady thereafter. At yesterday's close, the euro was trading at 137.42 against the euro.

Data from the Bank of Japan showed that the monetary base in Japan surged 35.3 percent on year to 245.816 trillion yen in September, after soaring 40.5 percent in August. Banknotes in circulation added 3.5 percent on year, while coins in circulation collected an annual 0.9 percent - both unchanged from the previous month.

The euro edged up to 1.2076 against the Swiss franc, from an early low of 1.2064 and held steady thereafter.

Looking ahead, U.S. weekly jobless claims for the week ended September 27 and factory orders for August are due to be released in the New York session.