Euro Appreciates Amid Hawkish Comments From ECB's Knot
06 September 2023 - 10:27AM
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The euro was higher against its major counterparts during the
European session on Wednesday, as European Central Bank Governing
Council member Klaas Knot remarked that markets may be misreading
the possibility of an interest rate hike at the monetary policy
meeting next week.
In an interview with Bloomberg, Knot said that markets could be
misjudging the chance of the rate hike next week.
"I continue to think that hitting our inflation target of 2% at
the end of 2025 is the bare minimum we have to deliver," Knot
added.
Preliminary data from Destatis showed that German factory orders
plunged in July, largely due to a big order for air and spacecraft
in the previous month.
Factory orders fell a calendar-and-seasonally adjusted 11.7
percent in July, which was much worse than the 4 percent slump
economists had forecast.
The euro rose to 1.0747 against the greenback and 0.8558 against
the pound, from its early lows of 1.0713 and 0.8526, respectively.
The currency is seen facing resistance around 1.09 against the
greenback and 0.87 against the pound.
The euro climbed to 1.4674 against the loonie and 158.44 against
the yen, reversing from a previous low of 1.4610 and a 2-day low of
157.76, respectively. Next key resistance for the currency may be
located around 1.48 against the loonie and 159.00 against the
yen.
The euro recovered to 1.8259 against the kiwi and 1.6834 against
the aussie, off its early lows of 1.8181 and 1.6759, respectively.
The currency may challenge resistance around 1.84 against the kiwi
and 1.70 against the aussie.
The euro touched 0.9557 against the franc, setting a 5-day high.
On the upside, 0.98 is possibly seen as its next resistance
level.
Looking ahead, U.S. and Canadian trade data for July and ISM
non-manufacturing PMI for August and the Fed Beige book report will
be released in the New York session.
The Bank of Canada will announce its interest rate decision at
10:00 am ET. The BoC is widely expected to keep its policy rate
steady at 5 percent.
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