Euro Extends Its Losses In The Asian Session
GCI Financial | Oct 20, 2014 02:07AM ET
On Friday, EUR declined 0.37% against the USD and closed at 1.2762. The ECB
Governing Council Member, Ewald Nowotny opined that the recent fall witnessed in the common currency was fuelling growth in the region. He further added that Euro-zone’s economic growth outlook for 2015 could be slashed from present 1.6% level, citing slowdown in global economic growth.
In other economic news, construction output in the Euro-zone increased 1.5% on a monthly basis in August, compared to a revised rise of 0.3% registered in the prior month. Elsewhere, Italian current account surplus narrowed to €2.31 billion in August, following a surplus of €6.82 billion recorded in July.
Separately, the ECB’s Executive Board Member, Benoit Coeure indicated that the authorities in the Euro-zone must reform their economies to take full advantage of policies aimed at boosting demand. He also indicated that the Euro-zone is still on a recovery path and expects the region’s economy to expand in Q3 and Q4 of 2014.
The ECB Vice President, Vitor Constancio, warned that any further decline in the Euro-zone inflation expectations could be extremely harmful; however he further explained that the central bank’s accommodative monetary policy would help ensure a safer return to price stability in the region, in the medium term.
The US Dollar ended the week on a higher footing after the release of upbeat economic data from the US. The University of Michigan reported that consumer sentiment in the nation climbed to a reading of 86.4, marking its highest level since July 2007 in October and up from previous month’s level of 84.6. Additionally, housing starts in the nation registered a rise of 6.3% on a monthly basis in September, beating market expectations for a gain of 5.4% and compared to a drop of 12.8% registered in the prior month. Meanwhile, building permits unexpectedly rose to 1018.0 K in September, lower than market expectations to advance to a level to 1030.0 K units.
Meanwhile, the Fed Chairperson, Janet Yellen cautioned that growing economic inequality in the US, posed a risk to the nation’s economic growth. She also mentioned that, more investment in education was needed to reduce economic inequality.
The Boston Fed President, Eric Rosengren in an interview stated that the Fed would most likely raise its interest rates in the middle of 2015 and added that the central bank would end its monthly bond-buying program this month as planned.
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In the Asian session, at GMT0300, the pair is trading at 1.2752, with the EUR trading 0.08% lower from Friday’s close.
The pair is expected to find support at 1.2713, and a fall through could take it to the next support level of 1.2673. The pair is expected to find its first resistance at 1.2815, and a rise through could take it to the next resistance level of 1.2877.
Trading trends in the Euro today are expected to be determined by Germany’s producer price index as well as the Euro-zone’s current account data, scheduled in a few hours.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
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