Euro Climbs After ECB Nowotny's Rate Hike Comments
March 17 2017 - 12:03AM
RTTF2
The euro strengthened against the major counterparts in
pre-European deals on Friday, as the European Central Bank policy
maker Ewald Nowotny signaled that a rate hike could on the cards
and affirmed that the rate hike may apply in a manner different
from the American model.
In an interview with German newspaper Handelsblatt on Thursday,
Nowotny said that the ECB should raise the deposit rate, currently
at -0.40 percent, earlier than the prime rate.
"The structure of the interest rates does not always need to
remain constant," Nowotny said.
The bank has not yet decided about whether the rate hike should
come before stopping bond purchases, he added.
The currency was also buoyed by rising risk appetite, as
investors continued to be optimistic after the U.S. Federal Reserve
maintained its interest rate forecast for this year.
While the Fed raised rates by a quarter point as widely expected
on Wednesday, the central bank's projections called for only two
more rate hikes this year. The unchanged outlook for rate hikes
this year offset concerns that the Fed intends to accelerate the
pace of rate increases.
The currency has been trading in a positive territory in the
Asian session.
The euro strengthened to 1.0782 against the greenback, its
strongest since February 6. At yesterday's close, the pair was
valued at 1.0764. Continuation of the euro's uptrend may see it
challenging resistance around the 1.10 zone.
The single currency firmed to a 3-day high of 122.25 against the
yen and held steady thereafter. The euro-yen pair closed Thursday's
trading at 121.96.
The euro advanced to 0.8735 against the pound and 1.0742 versus
the Swiss franc, from yesterday's closing quotes of 0.8710 and
1.0727, respectively. The euro is poised to challenge resistance
around 0.90 against the pound and 1.09 against the franc.
The euro edged up to 1.4362 against the loonie, from yesterday's
closing value of 1.4336. If the euro-loonie pair extends rise, it
may locate resistance around the 1.45 region.
The euro rose back to 1.5423 against the kiwi, from an early low
of 1.5389. The euro had already set a 4-day high of 1.5440 versus
the kiwi in the Asian session. The next possible resistance for the
euro may be seen around the 1.56 level.
The latest survey from Business NZ showed that the manufacturing
sector continued to expand in February, and at a faster pace, with
a Performance of Manufacturing Index score of 55.2.
That's up from the upwardly revised 52.2 in January, and it
moves further above the boom-or-bust line of 50 that separates
expansion from contraction.
The 19-nation currency recovered to 1.4033 against the aussie,
from its previous low of 1.4007. The euro is heading to pierce its
early Asian session's 3-day high of 1.4055. The euro is seen
finding resistance around the 1.42 mark.
Looking ahead, Eurozone trade balance for January is due to be
released at 6:00 am ET.
In the New York session, Canada manufacturing sales data for
January, U.S. industrial production for February, leading indicator
for February, U.S. University of Michigan's preliminary consumer
sentiment index for March, and U.S. Baker Hughes rig count data are
slated for release.
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