Euro Falls As Fed Rate Hike Worries Weigh
The euro depreciated against its major counterparts in the
European session on Thursday, as investors continued to worry about
the Federal Reserve tightening its monetary policy at a much faster
pace to control inflation.
U.S. President Joe Biden said on Wednesday that the central bank
should recalibrate the policy support in the wake of recent price
increases and strengthening of the economy.
While three rate hikes are already priced in, some analysts
forecast a fourth one for this year.
Members broadly agreed that progress on economic recovery and
towards the Governing Council's 2% medium-term inflation target
permitted a gradual normalisation of the monetary policy stance,
the minutes from December 15 and 16 showed.
"Given the measurable progress made in the convergence of
medium-term inflation towards the target, there was no need for a
further loosening of the stance through additional asset
purchases," the minutes said.
The euro pulled back from its previous 2-day high of 130.09
against the yen, with the pair trading at 129.45. The pair was
worth 129.67 when it ended deals on Wednesday. On the downside,
125.00 is possibly seen as the next support level for the euro.
After gaining to a 2-day high of 1.1369 against the greenback in
the Asian session, the euro moved down to 1.1331. The pair had
closed Wednesday's deals at 1.1342. The euro is seen finding
support around the 1.12 mark.
The euro declined to 0.8317 against the pound, after rising to
0.8339 at 2:45 am ET. The euro-pound pair had finished yesterday's
trading session at 0.8331. Next key support for the euro is likely
seen around the 0.82 level.
The euro depreciated to a fresh 2-week low of 1.5612 against the
aussie, compared to Wednesday's close of 1.5719. The euro is likely
to face support around the 1.53 region, if it falls again.
The euro retreated to 1.6684 against the kiwi and 1.4149 against
the loonie, down from its prior 2-day highs of 1.6797 and 1.4210,
respectively. The euro had finished Wednesday's deals at 1.6710
against the kiwi and 1.4192 against the loonie. The euro is poised
to challenge support around 1.64 against the kiwi and 1.10 against
The European currency remained lower against the franc and was
trading at 1.0379. At Wednesday's close, the pair was valued at
1.0386. Further downtrend may take the euro to a support around the
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