Euro (EUR) Exchange Rate Struggles in the wake of BoE minutes and FOMC Decision
Although a lack of particularly influential economic reports for the Eurozone did restrain Euro movement on Thursday, the common currency declined against several of its major peers (notably the British Pound and US Dollar) as a result of global developments.
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Yesterday’s stable UK employment report, upbeat Bank of England meeting minutes and proactive Budget statement increased the appeal of the Pound and helped it advance.
Sterling largely retained gains overnight and was testing the significant 1.20 level against the Euro during the European session.
Meanwhile, the Federal Open Market Committee delivered its policy statement last night and the ‘Greenback’ broadly strengthened in its wake.
In the statement the FOMC announced the continued tapering of stimulus and hinted that interest rates in the world’s largest economy could be increased sooner than previously projected.
Federal Reserve Chairman Janet Yellen intimated that interest rates could be raised in six months time.
The content of the statement pushed the US Dollar higher against the Euro for a second day.
In the view of currency strategist Ian Stannard; ‘We’re looking for the Dollar to remain supported. We’d focus that very much against the commodity-related currencies. In initial moves the Euro could also have a bit of a setback.’
The Euro experienced minimal fluctuations following the publication of German producer price data.
The report showed unexpected stagnation in producer prices in February, month-on-month, and revealed that prices were down 0.9 per cent on the year.
Before the close of European trading additional Euro movement may be inspired by the release of US initial jobless claims and existing home sales reports.
Tomorrow investors will be taking an interest in the Eurozone’s current account figures, but the direction the Euro takes before the weekend will primarily be dictated by the Eurozone’s consumer confidence index.
Currently the Euro is trading against the Pound in the region of 0.8341 and is trading against the US Dollar in the region of 1.3767