Euro is still under pressure!!!
The euro remains under pressure on Thursday after the European Central Bank suggested the status quo monetary policy for the coming months.
After leaving its benchmark interest rate unchanged at 1.00%, as expected on Thursday morning, central bank President Jean-Claude Trichet affirmed that rates were “appropriate” and that the economy would continue to expand at a “moderate” pace with inflation “subdued over the policy-relevant horizon”.
While the rhetoric appeared similar to that of previous meetings, the differences came on the subject of Greece, whose debt rating now falls below the minimum standards to be accepted at the central bank’s open market operations.
“We will not change out collateral framework for the sake of any particular country”, said Trichet when asked whether or not the ECB would consider making an exception for Greek government bonds.
Earlier this morning Greece unveiled plans to bring the country’s spending within the limits outlined by the European Union by 2012. In addition, a new report from the Moody’s ratings agency suggests that the country has little time to address its budget concerns before facing further ratings cuts.
The comments, combined with the view that monetary policy would continue to remain loose, put downward pressure on the euro throughout the morning session.
At 11 a.m. EST, EUR/USD was down 47 pips at 1.4464 after trading in a range between 1.4459 and 1.4556. Short term support lies at 1.4554. The Fibonacci level at 1.4570 presents itself as the next resistance, followed by 1.4679.
Meanwhile, EUR/GBP was down 363 pips at 0.88756, after trading within 0.89695 to 0.89358. Key short term support is at 0.8847 with resistance at 0.8953, 0.9027 and 0.9055.
No comments:
Post a Comment