The euro was higher against its major counterparts in the European session on Thursday, after the European Central Bank’s minutes from the latest meeting showed that the Governing Council is prepared to adjust all of its instruments, including the deposit facility rate, to ensure that inflation moved toward its target in a sustained manner.

Members broadly agreed that there was no room for complacency and that the Governing Council had to continue to stand ready and use all of its instruments, if required, to ensure a robust convergence of inflation towards its goal, the minutes from the bank’s January 20-21 meeting showed.

Regarding the latest exchange rate developments, policymakers acknowledged that the recent persistent trend appreciation of the euro had reversed since the start of 2021.

Although members noted that the nominal effective exchange rate was at a historically high level and had a negative impact on inflation, they also observed that the impact of exchange rate movements on inflation might be overestimated in standard models.

The risks surrounding the euro area growth outlook remained tilted to the downside, with the ongoing pandemic and its implications on economic and financial conditions acting as sources of downside risk, the minutes showed.

ECB policymakers emphasized that the recalibration of instruments decided on in December remained appropriate and well-balanced, whereas all instruments needed to remain on the table, with due consideration of benefits and possible unintended side effects, it added.

The euro showed mixed trading against its major opponents in the Asian session. While it rose against the franc, it held steady against the greenback and the pound. Versus the yen, it fell.

The euro hovered at a 9-day high of 1.0831 against the franc. At Wednesday’s close, the pair was worth 1.0812. The euro is seen locating resistance around the 1.10 mark.

Data from the Federal Customs Administration showed that Switzerland’s exports grew in January after falling in the previous month.

Exports gained by a real 5.7 percent month-on-month in January, while imports rose 1.4 percent.

The euro approached 1.2090 against the greenback, up from Wednesday’s closing value of 1.2034. The euro may test resistance around the 1.22 region, if it gains again.

The European currency reached as high as 127.73 against the yen, following a low of 127.33 seen in the Asian session. The pair had closed Wednesday’s deals at 127.37. Should the euro strengthens further, 128.5 is found as its resistance level.

The euro edged higher to 1.5549 against the aussie and 1.5336 against the loonie, off its early more than a 2-year low of 1.5506 and a new 4-week low of 1.5280, respectively. The euro was valued at 1.5288 against the loonie and 1.5518 against the aussie at yesterday’s close. The next likely resistance for the euro is seen around 1.58 against the aussie and 1.55 against the loonie.

The single currency turned higher against the kiwi, with the pair trading at 1.6782. This followed a 2-day low of 1.6727 hit at 5:00 pm ET. At yesterday’s trading close, the pair was quoted at 1.6743. The euro is poised to challenge resistance around the 1.72 mark.

In contrast, the euro dropped to 0.8659 against the pound, its lowest level in a year. The euro-pound pair had ended yesterday’s trading session at 0.8678. The euro is likely to target support around the 0.84 mark.

Eurozone flash consumer sentiment index for February is set for release at 10:00 am ET.

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

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