European Session – Euro drifts lower after ECB’s Constancio suggests rates to remain low
March 11, 2014 2:42 pm
Currency markets were directionless in a quiet European session. Most major currencies, like the euro and the sterling, drifted lower against the dollar, while the yen was steady after the Bank of Japan left policy unchanged.
The euro moved further off a recent 2-1/2 year high against the dollar after being weighed down by comments from senior European Central Bank (ECB) policymaker Vitor Constancio who signaled that rates are set to remain accommodative for some time to come. He suggested the market has misunderstood the ECB message and the Bank can still ease policy further, either in the form of a rate cut, or QE or buying assets.
The euro dipped below 1.3850 for the first time since last Thursday and finished the European session at 1.3852 with a 0.12% loss. Last week the euro rallied to 1.39 after ECB President Mario Draghi downplayed deflation risks in the Eurozone.
Sterling was one of the worst performing major currencies today against the dollar after weakening on mixed UK data. Manufacturing rose 0.4% in January from December but industrial production rose 0.1% which was less than the 0.2% forecast. Meanwhile, Bank of England Governor Mark Carney signaled that rates will be held down and any rate increases will be limited and gradual.
The pound ended down 0.12% in Europe at 1.6625 and is down 0.5% since Monday.
The dollar was trading sideways against the yen, trading in the low 103s after the Bank of Japan left policy unchanged and did not signal any further policy easing for now. Despite cautioning on exports, the Bank noted an ‘increasingly evident’ upswing in business investment and acceleration in industrial production. This helped buoy the yen, which is also being supported by safe haven demand due to ongoing geopolitical tensions in the Ukraine.
The dollar ended the European session with a 0.06% loss against the yen at 103.24, at the lower end of today’s 103.18 – 103.41 range.
Currency markets were directionless in a quiet European session. Most major currencies, like the euro and the sterling, drifted lower against the dollar, while the yen was steady after the Bank of Japan left policy unchanged.
The euro moved further off a recent 2-1/2 year high against the dollar after being weighed down by comments from senior European Central Bank (ECB) policymaker Vitor Constancio who signaled that rates are set to remain accommodative for some time to come. He suggested the market has misunderstood the ECB message and the Bank can still ease policy further, either in the form of a rate cut, or QE or buying assets.
The euro dipped below 1.3850 for the first time since last Thursday and finished the European session at 1.3852 with a 0.12% loss. Last week the euro rallied to 1.39 after ECB President Mario Draghi downplayed deflation risks in the Eurozone.
Sterling was one of the worst performing major currencies today against the dollar after weakening on mixed UK data. Manufacturing rose 0.4% in January from December but industrial production rose 0.1% which was less than the 0.2% forecast. Meanwhile, Bank of England Governor Mark Carney signaled that rates will be held down and any rate increases will be limited and gradual.
The pound ended down 0.12% in Europe at 1.6625 and is down 0.5% since Monday.
The dollar was trading sideways against the yen, trading in the low 103s after the Bank of Japan left policy unchanged and did not signal any further policy easing for now. Despite cautioning on exports, the Bank noted an ‘increasingly evident’ upswing in business investment and acceleration in industrial production. This helped buoy the yen, which is also being supported by safe haven demand due to ongoing geopolitical tensions in the Ukraine.
The dollar ended the European session with a 0.06% loss against the yen at 103.24, at the lower end of today’s 103.18 – 103.41 range.
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