Euro Mixed After ECB Announcement
12 März 2020 - 10:49AM
RTTF2
The euro showed mixed trading against its major counterparts in
the European session on Thursday, after the European Central Bank
kept key rates unchanged and boosted asset purchase program to
counter the economic impact of the coronavirus.
The Governing Council left the key interest rates unchanged
after the policy session in Frankfurt.
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 expanded quantitative easing program by 120 billion
euros until the end of the year.
The ECB will conduct additional longer-term refinancing
operations temporarily to provide immediate liquidity support to
the euro area financial system.
In TLTRO III, the bank will apply more favourable terms during
the period from June 2020 to June 2021 to support bank lending to
those affected most by the spread of the coronavirus, in particular
small and medium-sized enterprises.
Data from Eurostat showed that Eurozone industrial production
expanded for the first time in five months in January.
Industrial output grew at a faster-than-expected pace of 2.3
percent on a monthly basis and in contrast to a revised 1.8 percent
drop in December.
The currency showed mixed trading against its major counterparts
in the Asian session. While it rose against the greenback and the
pound, it fell against the yen and the franc.
The euro rebounded to 1.0577 against the franc, from a 3-day low
of 1.0545 seen at 7:15 am ET. The euro is seen finding resistance
around the 1.09 mark.
The euro firmed to a 5-month high of 0.8899 against the pound,
from yesterday's closing value of 0.8785. Next key resistance for
the euro is likely seen around the 0.90 level.
Survey data from the Royal Institution of Chartered Surveyors
showed that UK house price inflation gathered momentum in February
as prices increased across all parts of the country.
The house price balance rose sharply to 29 percent in February
from 18 percent in January. This was also above economists'
forecast of 20 percent.
The euro dropped to a weekly low of 1.1198 against the
greenback, from Wednesday's closing value of 1.1269. Should the
euro falls further, it is likely to test support around the 1.105
region.
The euro remained lower against the yen, at 116.92. The EUR/JPY
pair has set a 3-day low of 116.31 at 7:30 am ET. The euro is
poised to challenge support around the 114.00 mark.
Data from the Bank of Japan showed that Japan producer prices
fell 0.4 percent on month in February.
That was shy of expectations for a decline of 0.3 percent
following the 0.2 percent increase in January.
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