Euro Lower After ECB Officials Remarks
The euro weakened against its major counterparts in the European
session on Monday, following remarks from European Central Bank
officials outlining a sluggish global economic outlook and its
impact on the euro area economy.
In an interview with the Financial Times, ECB Executive Board
member Benoit Coeure said that the performance of the bloc's
economy is not too bad, but signals from financial markets,
especially from bonds, were "quite alarming."
"The constellation of prices in the bond market paints a picture
of the global economy which is very bleak," Coeure said.
"So, if the conclusion were that cutting rates is the best
option, then we would have to consider the impact of negative rates
on financial intermediation, especially for banks," he added.
ECB Vice President Luis de Guindo said Saturday that if there
would be a deterioration in inflation expectations, then the
central bank will act.
Speaking to Italian newspaper Corriere della Sera, de Guindos
said, "What we need to see is a de-anchoring of inflation
expectations" for more stimulus measures.
"This has not yet happened, despite the fact that there has been
a drop in market-based inflation expectations."
The currency traded mixed against its major opponents in the
Asian session. While it held steady against the greenback and the
pound, it rose against the franc and the yen.
The euro depreciated to 1.1204 against the greenback, from a
high of 1.1224 touched at 9:45 pm ET. The euro is likely test
support around the 1.09 level, if it falls again.
The European currency pulled back to 121.65 against the yen, not
far from near a 2-week low of 121.59 seen at 5:00 pm ET. The euro
is seen finding support around the 119.00 region.
The euro hovered at a 6-day low of 1.1190 against the franc,
coming off from a high of 1.1216 set at 12:00 am ET. On the
downside, 1.09 is possibly seen as the next support level for the
The single currency eased back to 0.8904 against the pound,
after having climbed to 0.8917 at 3:45 am ET. The euro is poised to
face support around the 0.88 region.
Data from the property website Rightmove showed UK house prices
rose slightly in June.
House prices increased 0.3 percent month-on-month in June but
remained flat on a yearly basis. Prices had advanced 0.9 percent on
month and 0.1 percent annually in May.
The euro edged lower to 1.7214 against the kiwi, following an
advance to 1.7273 at 6:00 pm ET. Next key support for the euro is
seen around the 1.70 region.
In contrast, the euro held steady against the loonie, after
having rebounded to 1.5050 at 4:00 am ET. The pair had finished
deals at 1.5031 on Friday.
The euro was trading higher at 1.6319 against the aussie,
following a 4-day decline to 1.6299 at 5:00 pm ET. The currency is
seen finding resistance around the 1.65 region.
Looking ahead, NAHB housing market index and New York Fed's
Empire manufacturing survey for June are due in the New York
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