For the 24 hours to 23:00 GMT, the EUR rose 0.45% against the USD and closed at 1.2335, after minutes of the European Central Bank’s (ECB) January meeting hinted that policymakers could soon indicate that it is mulling an earlier end to its stimulus programme.
Minutes showed that some policymakers pushed for considering a revision in the language pertaining to the monetary policy stance early this year. However, it was concluded that such an adjustment would be premature at this juncture, as inflation is still not moving decisively higher despite the robust pace of economic expansion. Further, officials broadly agreed that the perceived volatility in the Euro represents a source of uncertainty and need to be monitored.
On the economic front, Germany’s Ifo business climate index fell to a 5-month low level of 115.4 in February, on the back of growing concerns over political uncertainty and recent market turmoil. The index had recorded a level of 117.6 in the prior month, while market participants had envisaged for a drop to a level of 117.0. Moreover, the nation’s Ifo business expectations index eased to a level of 105.4 in February, hitting its lowest level in 10 months. The index had registered a reading of 108.4 in the prior month, while markets were expecting for a fall to a level of 107.9.
Also, the nation’s Ifo current assessment index eased more-than-expected to a level of 126.3 in February, compared to market consensus for a drop to a level of 127.0 and following a level of 127.7 in the prior month.
Macroeconomic data revealed that first time claims for the US unemployment benefits unexpectedly eased to a level of 222.0K in the week ended 17 February, hitting its lowest level in nearly 45 years and pointing to a strong growth in the labour market. Initial jobless claims had recorded a revised reading of 229.0K in the previous week, while markets were anticipating for a rise to a level of 230.0K. Additionally, the nation’s leading indicator registered a rise of 1.0% on a monthly basis in January, beating market expectations for an advance of 0.7%. In the previous month, leading indicator had registered a rise of 0.6%.
In the Asian session, at GMT0400, the pair is trading at 1.2306, with the EUR trading 0.24% lower against the USD from yesterday’s close.
The pair is expected to find support at 1.2260, and a fall through could take it to the next support level of 1.2214. The pair is expected to find its first resistance at 1.2352, and a rise through could take it to the next resistance level of 1.2398.
Going ahead, traders would look forward to the Euro-zone’s final inflation numbers for January as well as Germany’s final 4Q GDP data, slated to release in a few hours.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.