Euro Rises Ahead Of German CPI Data
29 April 2015 - 12:09PM
RTTF2
The euro strengthened against the other major currencies in the
European session on Wednesday, as traders await the German
inflation data for April, due later in the day. The outcome of the
two-day FOMC meeting, which concludes later today is also in
focus.
At 8.00 am ET, Destatis is slated to release German consumer
prices for April. Economists forecast prices to rise 0.4 percent on
a yearly basis in April following a 0.3 percent increase in March.
The harmonized index is expected to grow 0.2 percent annually, the
same rate as seen in the prior month.
The Fed said conclusively at its March meeting that interest
rates will be data-dependent. Public remarks of Fed officials since
the March meeting also emphasized a cautious approach to
interest-rate increases.
The Fed is widely expected to leave interest rates unchanged at
the meeting, but traders will be paying close attention to comments
regarding a rate hike at the June meeting.
In news out of Greece, Prime Minister Alexis Tsipras on Tuesday
threatened to call a public referendum on any deal with the
country's international creditors if EU talks collapse. In other
economic news, data from the European Commission showed that
Eurozone economic sentiment index fell to 103.7 from 103.9, which
was the highest score since July 2011. This was the first fall in
five months. It was expected to remain unchanged at 103.9 in
April.
In the Asian trading, the Euro held steady against its major
rivals.
In the European trading today, the euro rose to nearly a 5-week
high of 1.0507 against the Swiss franc, nearly 4-week highs of
1.1013 against the U.S. dollar and more than a 3-week high of
131.27 against the yen, from early lows of 1.0475, 1.0958 and
130.25, respectively.
If the euro extends its uptrend, it is likely to find resistance
around 1.07 against the franc, 1.13 against the greenback and
133.00 against the yen.
The euro advanced to 0.7157 against the pound, from an early low
of 0.7136. On the upside, 0.75 is seen as the next resistance level
for the euro.
Moving away from an early near 2-year low of 1.3677 against the
Australian dollar, the euro edged up to 1.3788. The euro may test
resistance near the 1.43 region.
Against the New Zealand and the Canadian dollars, the euro
climbed to 2-day highs of 1.4309 and 1.3243 from early lows of
1.4186 and 1.3189, respectively. The next possible upside target
for the euro is seen at 1.46 against the kiwi and 1.34 against the
loonie.
Looking ahead, preliminary German inflation report for April,
Canada industrial product price and raw materials price indices for
March, U.S. first quarter GDP data and U.S. pending home sales data
for March are set to be published in the New York session.
At 2:00 pm ET, Federal Reserve will announce its decision on
monetary policy. The Fed is expected to hold rates at 0.25
percent.
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