Euro Mixed After ECB Holds Key Rates Steady

Trading 30 avr 2020 Donner votre avis

The euro showed mixed trading against its key counterparts in the European session on Thursday, after the European Central Bank held its key interest rates unchanged and unveiled a new package of "pandemic" loans in its latest effort to support the currency bloc from the coronavirus pandemic.

The Governing Council left the main refi rate at a record low of zero percent and the deposit rate at -0.50 percent. The marginal lending facility rate is at 0.25 percent.

The central bank said that it is fully prepared to increase the size of the 750 billion pandemic emergency purchase programme.

The ECB said it will launch a new series of non-targeted pandemic emergency longer-term refinancing operations to support liquidity conditions in the euro area financial system.

The Governing Council decided to reduce the interest rate on TLTRO III operations during the period from June 2020 to June 2021 to 50 basis points below the average interest rate on the Eurosystem's main refinancing operations prevailing over the same period, the ECB said.

Flash estimate from Eurostat showed that inflation slowed in April due to a sharp decline in energy prices.

Inflation slowed to 0.4 percent in April from 0.7 percent in March. Nonetheless, this was above forecast of 0.1 percent. The fall in inflation was largely driven by a 9.6 percent decrease in energy prices.

Data from the Federal Employment Agency showed that German unemployment increased sharply in April as coronavirus pandemic weighed on job creation and economic activity.

The jobless rate rose to 5.8 percent in April from a near-record low of 5.0 percent in March. The rate was forecast to rise moderately to 5.2 percent.

The currency declined against its most major counterparts in the Asian session, as investors await a policy decision from the European Central Bank amid worsening economic situation in the currency bloc.

The euro held steady against the greenback, after climbing to a 10-day high of 1.0891 at 3:00 am ET. The pair had closed Wednesday's deals at 1.0871.

The euro appreciated to a 2-day high of 116.14 against the yen and moved sideways in subsequent deals. The pair was worth 115.92 when it ended deals on Wednesday.

Data from the Cabinet Office showed that Japan's consumer confidence weakened at a record pace in April.

On a seasonally adjusted basis, the consumer confidence index decreased to 21.6 in April from 30.9 in March.

The euro was lower against the franc with the pair trading at 1.0557. At Wednesday's close, the pair was valued at 1.0588. The euro is seen finding support around the 1.04 mark.

The euro weakened to 0.8675 against the pound, a level unseen since March 9. The euro-pound pair had finished yesterday's trading session at 0.8722. Next key support for the euro is likely seen around the 0.84 level.

Looking ahead, Canada GDP data for February and industrial product price index for March, as well as U.S. weekly jobless claims for the week ended April 24 and personal income and spending data for March are slated for release in the New York session.

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