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EUR Slips As ECB Acknowledges Balanced Risks For Inflation

FOREX
  • Despite a broadly as expected ECB decision and press conference, and President Lagarde saying it was too early to discuss the timing of cuts, the Euro came under pressure on Thursday. EURUSD currently sits around 0.50% in the red, with the pair hovering just above the year’s lows as we approach the APAC crossover.
  • 1.0900 capped the topside as the press conference began, however, an acknowledgement that wage pressures have started to ease saw a quick 50 pip jolt lower and a breaching of the tight overnight range. Comments on the rate cut debate being premature failed to garner any support, with the single currency keeping a downward bias for the majority of the US session.
  • On the downside, a break of 1.0822, Tuesday’s and today’s lows, would resume the recent bearish theme. Lower US yields in the aftermath of the mixed US GDP data briefly supported the Yen, prompting EURJPY to breach yesterday’s lows below 160.00 and print 159.70 before stabilising.
  • With major equities tilted into positive territory, the likes of EURAUD, EURNZD and especially EURCAD (-0.75%) are showing particular underperformance, with the latter further weighed by a 3% rally for crude futures.
  • Despite the lower yields in the US, the USD index looks set to post a 0.35% advance on the session as markets turn their focus to PCE Core Deflator and US personal spending data on Friday. It is worth noting that the Bank of Japan minutes are scheduled overnight in Asia.
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