With a heavy news day for Europe ahead, the Euro is likely to experience notable movement during the local session.
While concerns that the European Central Bank might introduce additional easing measures have worn on the Euro in recent days, the common currency was able to rebound against peers like the US Dollar yesterday following the release of better-than-forecast services data for the Eurozone.
The Euro remained trapped in a bearish relationship with the Pound as encouraging UK industrial/manufacturing production data bolstered the British asset but managed to advance on the ‘Greenback’ and Yen.
EUR/USD gains were aided as the US Dollar softened in response to expectations that US GDP data will show growth slowed in the fourth quarter, lessening the likelihood of the Federal Reserve tapering quantitative easing before the end of the year.
The Euro is currently trading against the US Dollar in the region of 1.3523
Ahead of the European Central Bank’s policy statement currency strategist Brian Daingerfield was quoted as saying; ‘There’s quite a bit of uncertainties ahead of the ECB meeting. There’s some concern about maybe the market might have gone a little bit too far with Euro weakness ahead of this meeting.’
Bloomberg news agency has also reported on the possibility of the Euro advancing to a two-year high against its US rival.
According to Bank of America Corp, technical indicators have signalled that the Euro could brush the 1.40 US Dollar level if it pushes beyond its recent high of 1.3835 US Dollars. Despite fears of further ECB intervention and mixed economic data for the Eurozone, the Euro has managed to continue trading above 1.34 US Dollars, hinting at a possible bullish trend for the common currency.
McNeil Curry, a technical strategist with Bank of America Merrill Lynch, asserted; ‘Euro-Dollar is still in an uptrend. All we’ve done is sell off very aggressively to previous support’.
While today’s ECB rate decision will be the main cause of market movement, the Euro could also fluctuate in response to German industrial production data.
The US GDP report will also impact the EUR/USD pairing.
Economists have forecast that the US economy expanded by 2.0 per cent in the third quarter following expansion of 2.5 per cent in the second quarter.
Meanwhile, the Bank of England rate decision could drive EUR/GBP movement.
Euro (EUR) Exchange Rates
As of 07:00 am GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3523 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8408 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4267 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6087 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4089 >