Euro Advances As ECB's Villeroy Cautions About Weak Currency
The euro climbed against its major counterparts in the European
session on Monday, following comments from European Central Bank
Governing Council member Francois Villeroy de Galhau that a weak
common currency would act against the price stability goal.
The ECB would closely watch developments in the effective
exchange rate, as a significant driver of imported inflation,"
Villeroy told a conference at the Bank of France.
"A euro that is too weak would go against our price stability
Villeroy indicated that he expects a decisive policy meeting in
June and an active summer on the monetary policy front.
The pace of the further steps would depend on actual activity
and inflation data with some optionality and gradualism but the
central bank should at least move towards the neutral rate, he
Over the weekend, ECB policymaker Pablo Hernández de Cos said
that the central bank is expected to decide at its next meeting to
terminate the APP program in July and then moving to raise interest
German bond yields rose, with the yield on the 10-year German
bund reaching 1.002 percent.
The euro climbed to 1.0436 against the greenback, hitting a
4-day high. If the euro rises further, it may likely seek
resistance around the 1.08 level.
The euro rose to 4-day highs of 135.04 against the yen and
0.8534 against the pound, up from an early low of 133.74 and near a
2-week low of 0.8471, respectively. The currency is likely to face
resistance around 137.00 against the yen and 0.88 against the
The euro firmed to a 5-day high of 1.0489 against the franc,
after falling to 1.0410 at 5:45 pm ET. On the upside, 1.07 is
possibly seen as its next resistance level.
Against the loonie, the euro reached as high as 1.3502,
following a low of 1.3418 hit at 7:45 pm ET. The euro may possibly
challenge resistance around the 1.38 level.
The euro held steady against the kiwi, after rising to a 4-day
high of 1.6687 in the Asian session, reversing from an early 1-week
low of 1.6527. At Friday's trading close, the pair was quoted at
The euro advanced to 1.5118 against the aussie in the previous
session, from an early 1-week low of 1.4962, and held steady
thereafter. The pair had closed Friday's deals at 1.4995.
Looking ahead, Canada housing starts for April are scheduled for
release at 8:15 am ET.
The New York Fed's empire manufacturing survey for May, Canada
wholesale and manufacturing sales for March will be featured in the
New York session.
At 10:00 am ET, Bank of England Governor Andrew Bailey and MPC
members will testify on monetary policy before Parliament's
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