Euro Declines Against Majors

Euro Declines Against Majors

11 March 2016, 14:25
Roberto Jacobs
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Euro Declines Against Majors

The euro fell against its major opponents in European deals on Friday, amid stark contrast in the European Central Bank's monetary policy from those of other major central banks in rest of the world.

In a surprise move, the European Central Bank expanded its stimulus measures on Thursday, which includes a cut in its key rates, increase in QE purchases to EUR 80 billion a month from EUR 60 billion a month, commencement of purchase of corporate debts and launch of bank funding plan, to prop up ailing eurozone economy.

The monetary polices of the Federal Reserve and Bank of England diverge from the ECB, causing gyrations in bond movements.

German bond yields fell, with the yield on benchmark 10-year note sliding 0.29 percent, while that of 2-year note was lower by 0.46 percent. Yields move inversely to bond prices.

Final data from Destatis showed that Germany's consumer prices remained unchanged in February from a year ago as initially estimated.

The consumer price index was unchanged after rising 0.5 percent in January and 0.3 percent in December.

The currency showed mixed performance in Asian trading. While the euro declined against the greenback and the pound, it held steady against the franc. Against the yen, it was higher.

In European deals, the euro weakened to 1.4669 against the loonie, 1.4752 against the aussie and 1.6782 against the kiwi, down from early highs of 1.4934, 1.5024 and 1.6548,respectively. The euro is likely to find support around 1.45 against the loonie, 1.46 against the aussie and 1.64 against the kiwi.

Pulling away from an early 3-week high of 126.96 against the yen and a 10-day high of 0.7848 against the pound, the euro eased back to 126.10 and 0.7748,respectively. The next possible support for the euro may be found around 125.00 against the yen and 0.76 versus the pound.

The euro pared gains to 1.1080 against the greenback and 1.0946 versus the franc, from its early highs of 1.1210 and 1.1017, respectively. If the euro extends slide, 1.10 against the greenback and 1.08 against the franc are seen as the next support levels for the euro.

Looking ahead, Canada unemployment data and U.S. import price index, both for February, are set to be published in the New York session.


The material has been provided by InstaForex Company - www.instaforex.com

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