The euro appreciated against its major counterparts in the European session on Wednesday, as Eurozone bond yields stabilized and French industrial production rose more than expected in January, ahead of the European Central Bank decision due tomorrow.
Data from the statistical office Insee showed that France’s industrial production rebounded at a faster than expected pace in January.
Industrial production grew 3.3 percent month-on-month in January, reversing a 0.7 percent fall in December. Economists had forecast an increase of 0.5 percent.
Manufacturing output also expanded 3.3 percent, in contrast to December’s 1.4 percent fall. The growth was largely driven by an 8.4 percent rise in machinery and equipment goods production and 7.2 percent rise in coke and refined petroleum products output.
The major focus for markets will be the ECB’s monetary policy decision on Thursday. Policymakers are expected to keep rates on hold but could step up the pace of asset purchases to counter the rise in the bond yields.
Investors awaited U.S. inflation data and a critical 10-year bond auction for further direction.
The euro rose to 1.1905 against the greenback and 129.43 against the yen, from its early lows of 1.1869 and 128.96, respectively. The euro is likely to face resistance around 1.20 against the greenback and 131.5 against the yen.
The euro reversed from its early 8-day low of 1.1030 against the franc, with the pair trading at 1.1078. Should the euro rises further, 1.13 is possibly seen as its next resistance level.
The euro advanced to 0.8579 against the pound, after touching 0.8550, which was its lowest level since February 24. The euro may possibly face resistance around the 0.87 level.
In contrast, the euro pulled back to 1.5038 against the loonie, from a 2-day high of 1.5062 hit at 4:00 am ET. The euro is seen finding support around the 1.48 level.
The euro held steady against the aussie, after having eased from a high of 1.5478 seen at 1:15 am ET. At yesterday’s close, the pair was worth 1.5416.
Data from the Australian Bureau of Statistics showed that Australia building permits dropped a seasonally adjusted 19.4 percent on month in January – standing at 15,926.
That was in line with expectations following the 12.0 percent gain in December.
After rising to 1.6644 in late Asian deals, the euro retreated to 1.6598 versus the kiwi and held steady thereafter. This may be compared to a 1-week low of 1.6560 hit at 5:15 pm ET. The pair had closed yesterday’s deals at 1.6580.
Looking ahead, U.S. CPI for February will be published in the New York session.
At 10:00 am ET, the Bank of Canada announces decision on interest rates. Economists forecast the benchmark rate to hold at 0.25 percent.