Euro Falls After ECB Praet Suggests LTRO Discussion In March

Trading 20 fév 2019 Donner votre avis

The euro declined against its major counterparts in the European session on Wednesday, after the European Central Bank's chief economist Peter Praet suggested that a new round of Targeted Long-Term Refinancing Operation will be discussed as soon as the meeting in March.

Speaking in Frankfurt, Praet indicated that "the discussion will come very soon in the Governing Council," although it is unlikely to take decisions at that time.

Praet added that discussion of the criteria of any new loans was "a complicated thing, because it depends on the amount of stimulus you want to bring or not to bring."

The new long-term funding would offer an insurance policy to banks, which had been hurt by recent slowdown and began to feed through to businesses, he told.

Figures from the Federal Statistical Office showed that Germany's producer price inflation eased for a second straight month to its lowest level in eight months in January.

The producer price index rose 2.6 percent year-on-year in January, following a 2.7 percent in December. Economists were looking for 2.20 percent inflation.

European stocks held steady as hopes for a Sino-U.S. trade deal continued to build and British Prime Minister Theresa May ditched a radical Brexiter plan to save her EU exit deal.

Investors await the minutes of the Federal Reserve's January policy meeting for clues on policymakers' thinking on interest rates and its balance sheet reduction policy.

The euro rose against its major opponents in the Asian session, barring the pound.

The euro retreated to 125.49 against the Japanese yen, from more than a 2-week high of 125.94 hit at 8:45 pm ET. The euro is seen finding support around the 122.00 level.

Data from the Ministry of Finance showed that Japan logged a merchandise trade deficit of 1,452.2 billion yen in January.

That missed expectations for a shortfall of 1,029.5 billion yen following the 56.7 billion yen deficit in December.

Pulling away from an early session's high of 1.1358 against the greenback, the euro edged down to 1.1325. The euro is likely to challenge support around the 1.12 area.

The euro dropped to 1.1340 versus the Swiss franc, after having risen to 1.1366 at 4:15 am ET. If the euro falls further, 1.12 is likely seen as its next support level.

The single currency pared gains to 0.8686 against the pound, from a high of 0.8714 seen at 6:00 am ET. The euro is poised to find support around the 0.85 area.

The euro slipped to a 5-day low of 1.4933 against the loonie, reversing from a high of 1.4994 touched at 8:00 pm ET. Next key support for the euro is seen around the 1.47 region.

The European currency slightly eased back to 1.6507 against the kiwi, off an early high of 1.6536. On the downside, 1.63 is possibly seen the next support level for the euro.

On the flip side, the euro bounced off to 1.5865 against the aussie, from an early session's low of 1.5816. The next key resistance for the euro is seen around the 1.60 mark.

Data from the Australian Bureau of Statistics showed that Australia wage prices rose a seasonally adjusted 0.5 percent on quarter in the fourth quarter of 2018.

That was shy of expectations for an increase of 0.6 percent, which would have been unchanged.

Looking ahead, at 10:00 am ET, Eurozone flash consumer sentiment index for February is due.

The Fed will release minutes from the January 29-30 meeting at 2 pm ET.

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