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EUR Tilts Higher as ECB Convene to Address Market Volatility

FOREX
  • After a sanguine overnight session, the single currency ripped higher ahead of the NY crossover on reports of an unscheduled meeting of the ECB Governing Council, who have convened to discuss and address recent market volatility. The widening of peripheral European government bond yield spreads are said to the root of concern, prompting the ECB to stress that their PEPP reinvestment program will see proceeds invested into more peripheral debt than the capital key dictates. Markets await any formal statement from the bank, with the unscheduled meeting already underway.
  • Reports of the meeting helped support the single currency, putting EUR/USD either side of 1.05 ahead of US hours, with a hawkish speech from ECB's Wunsch adding to the upside. The June 13th highs remain the next upside level, in range at 1.0523.
  • The USD Index sits lower, led by the single currency, with attention turning to today's FOMC rate decision and press conference. The Fed are firmly seen raising rates by 75bps - the sharpest rate of increase for decades - as markets look to gauge the future rate path from the accompanying dot plot. The USD Index remains just below the cycle highs printed yesterday at 105.65. Scandi currencies are faring better, while the CAD extends the recent downtick.
  • Outside of the FOMC decision, it's a busy US data session, with Empire Manufacturing, May retail sales and import/export price indices due to cross.
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