Euro Weakens As Report Shows ECB To Extend QE Into 2018
October 13 2017 - 2:46AM
RTTF2
The euro declined against its major counterparts in the European
session on Friday, after media reports showed that the European
Central Bank is likely to extend its asset purchase program into
next year, while reducing monthly purchases to 30 billion
euros.
The ECB officials are considering to trim their monthly bond
buying to 30 billion euros from January and extend the program to
September, according to Bloomberg.
The central bank currently purchases bonds worth €60 billion per
month.
The ECB meets on October 26, when it plans to unveil details
about winding down its bond-buying program.
Investors awaited the U.S. inflation and retail sales reports
later in the day for more clues about monetary policy.
Final data from Destatis showed that Germany's inflation held
steady, as initially estimated, in September.
Consumer prices advanced 1.8 percent year-on-year in September,
the same rate as seen in August. The rate also matched the estimate
published on September 28.
The inflation rate was the highest since April, when it was 2
percent.
The currency showed mixed performance in the Asian session.
While it rose against the greenback and the franc, it held steady
against the yen and the pound.
The euro dropped to a 4-day low of 132.21 against the Japanese
yen, compared to Thursday's closing value of 132.81. If the
euro-yen pair extends decline, 131.00 is possibly seen as its next
support level.
Data from the Bank of Japan showed that Japan's M2 money stock
rose 4.1 percent on year in September, coming in at 979.3 trillion
yen.
That beat forecasts for an increase of 4.0 percent, which would
have been unchanged from the August reading.
The euro reversed from an early high of 1.1851 against the
greenback, falling to a 2-day low of 1.1815. On the downside, 1.17
is likely seen as the next support for the euro-greenback pair.
The single currency that finished yesterday's trading at 1.1539
against the franc declined to a 2-day low of 1.1524. The next
possible support for the euro-franc pair is seen around the 1.14
mark.
Data from the Federal Statistical Office showed that
Switzerland's producer and import prices climbed more than expected
in September.
Producer and import prices advanced 0.8 percent year-on-year in
September, faster than the expected growth of 0.6 percent.
The 19-nation currency slid to an 8-day low of 0.8876 against
the pound, compared to 0.8915 hit late New York Thursday. The euro
is seen finding support around the 0.87 region.
The euro weakened to a 4-day low of 1.4723 against the loonie,
weekly lows of 1.5075 against the aussie and 1.6537 against the
kiwi, from Thursday's closing values of 1.4757, 1.5124 and 1.6591,
respectively. Continuation of the euro's downtrend may see it
challenging support around 1.46 against the loonie, 1.49 against
the aussie and 1.64 against the kiwi.
Looking ahead, U.S. CPI and retail sales for September, business
inventories for August and University of Michigan's preliminary
consumer sentiment index for October are set for release in the New
York session.
At 10:25 am ET, Federal Reserve Bank of Chicago President
Charles Evans speak about the economy and monetary policy at the
Wisconsin Summit on Financial Literacy.
At 11:30 am ET, Federal Reserve Bank of Dallas President Robert
Kaplan speaks about the economy and monetary policy at the
Chartered Financial Analyst Institute, in Boston.
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