Euro Mixed After ECB Minutes
October 08 2020 - 05:42AM
RTTF2
The euro came in mixed against its key counterparts in the
European session on Thursday, after minutes from the European
Central Bank's recent meeting showed that policymakers agreed that
a further appreciation of the euro constituted a risk to both
growth and inflation.
Members assessed that the recent volatility in the exchange rate
of the euro required careful monitoring with regard to its possible
implications for the medium-term outlook for price stability, the
minutes from September 9 and 10 meeting showed.
"There were key downside risks to the medium-term outlook for
price stability, mainly related to the as yet uncertain economic
and financial implications of the pandemic," the minutes said.
The Governing Council reiterated its readiness to adjust all of
its instruments, as appropriate, to ensure that inflation moved
towards its goal in a sustained manner.
"While the PEPP was currently seen as the primary instrument for
providing additional monetary policy accommodation, it was noted
that further cuts in policy rates and changes to the conditions of
the TLTROs were also part of the toolkit for providing additional
monetary policy accommodation, if necessary," the minutes
added.
Data from Destatis showed that Germany's exports growth slowed
in August, while growth in imports gained momentum.
Exports were up 2.4 percent in August from July, whereas imports
accelerated to 5.8 percent from 1.1 percent.
The euro advanced in the Asian session, as risk sentiment
improved on hopes of a partial U.S. fiscal stimulus aimed to help
the airline industry and small businesses.
The euro climbed to a 1-week high of 1.0801 against the franc
from Wednesday's closing value of 1.0786. The euro may test
resistance around the 1.11 level.
Data from the State Secretariat for Economic Affairs showed that
Switzerland's jobless rate dropped marginally in September.
The jobless rate fell to a seasonally adjusted 3.3 percent in
September from 3.4 percent in August. Economists had expected a
rate of 3.4 percent.
The euro rebounded to 0.9123 against the pound, from its prior
2-day low of 0.9070, and held steady afterwards. The euro-pound
pair had finished yesterday's trading session at 0.9105. The euro
is seen finding resistance around the 0.94 level.
The euro pulled back from its previous 2-day high of 1.1782
against the greenback and was trading at 1.1752. The pair had
closed Wednesday's deals at 1.1760. On the downside, 1.16 is
possibly seen as the next support level for the euro.
After gaining to 124.88 at 2:00 am ET, the euro turned lower
against the yen and was steady in subsequent deals. The pair was
trading at 124.58, near where it ended deals on Wednesday.
Data from the Ministry of Finance showed that Japan posted a
current account surplus of 2,102.8 billion yen in August, down 1.5
percent on year.
That exceeded expectations for a surplus of 1,983.7 billion yen
following the 1,468.3 billion yen surplus in July.
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