Euro Lower As ECB Keeps Rates Unchanged, Introduces New TLTRO Loans
March 07 2019 - 3:25AM
RTTF2
The euro declined against its key counterparts in the European
session on Thursday, after the European Central Bank left its key
interest rates unchanged and launched a new round of long-term
loans for Eurozone banks on the back of slowing economic
momentum.
The Governing Council, led by Mario Draghi, left the key
interest rates unchanged after the policy session in Frankfurt.
The main refi rate is currently at a record low zero percent and
the deposit rate at -0.40 percent. The marginal lending facility
rate is at 0.25 percent. The decision was in line with
forecasts.
The bank said it will launch a new series of targeted
longer-term refinancing operations, or TLTRO-III, starting in
September 2019 and ending in March 2021, each with a maturity of
two years.
ECB President Mario Draghi will hold his customary post-decision
press conference at 8.30 am ET.
Data from Eurostat showed that Eurozone's economic growth in the
fourth quarter of 2018 matched its earlier estimates and employment
gains were also unrevised.
Gross domestic product grew 0.2 percent from the third quarter,
when the economy expanded 0.1 percent, revised from 0.2 percent
reported earlier.
The currency held steady against its major counterparts in the
Asian session, with the exception of the pound.
The euro depreciated to near a 3-week low of 1.1275 against the
greenback, from a high of 1.1320 touched at 6:15 am ET. Should the
euro continues its downtrend, 1.10 is likely seen as its next
support level.
The euro slipped to a weekly low of 126.05 against the yen,
after rising to 126.43 at 3:00 am ET. Next key support for the euro
is seen around the 125.00 mark.
The euro dropped to 1.1350 against the franc, pulling away from
a high of 1.1367 seen at 7:30 am ET. If the euro falls further,
1.12 is likely seen as its next support level.
Data from the State Secretariat for Economic Affairs showed that
Switzerland's jobless rate remained steady in February.
The seasonally adjusted jobless rate was 2.4 percent in
February, which was the same as seen in January. The outcome
matched economists' expectations.
The single currency retreated slightly to 0.8597 against the
pound, following an advance to a 2-day high of 0.8625 at 7:35 am
ET. This may be compared to a 3-day low of 0.8575 set in the Asian
session. The euro is seen finding support around the 0.84
level.
Figures from the Lloyds Bank subsidiary Halifax and IHS Markit
showed that UK house price inflation accelerated more-than-expected
in February to its highest level in six months.
The house price index rose 2.8 percent year-on-year following a
0.8 percent increase in January. Economists had forecast 1 percent
growth in house prices.
The euro weakened to 1.6622 against the kiwi, 1.5132 against the
loonie and 1.6011 against the aussie, reversing from its early
highs of 1.6716, 1.5212 and 1.6111, respectively. The next key
support levels for the euro are seen around 1.64 against the kiwi,
1.49 against the loonie and 1.57 against the aussie.
Looking ahead, Canada building permits for January, U.S. weekly
jobless claims for the week ended March 2 and consumer credit for
January are scheduled for release in the New York session.
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