EURGBP Euro vs Pound Sterling

The euro spiked higher against its major counterparts in the European session on Thursday, after the European Central Bank maintained its key rates at their record low and revised its forward guidance indicating that its key rates would remain on hold at least through the first half of 2020.

The Governing Council, led by ECB President Mario Draghi, left the key interest rates unchanged after the policy session in the Lithuanian capital of Vilnius, as expected.

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 bank changed its forward guidance to reflect that it expects any change to the interest rate only after the first half of next year. Earlier, the bank expected rates to remain unchanged at least through the end of this year.

"The Governing Council now expects the key ECB interest rates to remain at their present levels at least through the first half of 2020, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2 percent over the medium term," the bank said.

Data from Eurostat showed that the euro area economy expanded as initially estimated in the second quarter, mainly driven by household spending and investment.

Gross domestic product grew 0.4 percent sequentially, in line with the previous estimate and bigger than the 0.2 percent growth seen in the fourth quarter of 2018.

The currency traded mixed against its major counterparts in the Asian session. While it rose against the greenback and the pound, it held steady against the franc. Against the yen, it dropped.

The euro appreciated to 1.1272 against the greenback, from a 3-day low of 1.1201 touched immediately after the ECB decision. If the euro rallies further, 1.14 is likely seen as its next resistance level.

Following a 3-day low of 121.22 hit soon after the ECB announcement, the euro recovered to 121.95 against the Japanese yen. The euro is seen finding resistance around the 124.00 region.

The euro bounced off to 0.8858 against the pound, from a 3-day low of 0.8828 hit in the immediate aftermath of announcement. The next possible resistance for the euro is seen around the 0.90 level.

The European currency was trading higher at 1.1175 against the franc, up from a low of 1.1155 seen at 2:30 am ET. The euro is likely to test resistance around the 1.13 level.

The euro advanced to 1.5107 against the loonie, 1.6143 against the aussie and 1.6997 against the kiwi, after falling to a 6-day low of 1.5027, 3-day low of 1.6072 and more than a 4-week low of 1.6911, respectively post-ECB decision. The euro is poised to test resistance around 1.53 against the loonie, 1.63 against the aussie and 1.72 against the kiwi.

Looking ahead, U.S. and Canadian trade data for April, weekly jobless claims for the week ended June 1 and Canada Ivey PMI for May are scheduled to be released in the New York session.

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