Investing.com – The Euro took a big hit by the ECB’s economic forecast slash, rate hike delay and new cheap bank loans on Friday morning as the market looks to the U.S. employment data to be released later in the day.
The Euro was struggling near a 21-month low against the dollar as the European Central Bank (ECB) meeting on Thursday concluded with a series of dovish signals including a downbeat attitude towards the economic growth. The common currency stood at 1.1201 against the dollar at 10:00 PM EST (03:00 AM GMT) after dipping to 1.1176, its lowest since June 2017.
“We are (in) a period of continued weakness and pervasive uncertainty,” said ECB President Mario Draghi.
Draghi said in a statement following the policy meeting that the ECB would launch a new series of quarterly targeted longer-term refinancing operations in September to help preserve favourable bank lending conditions and smooth transmission of monetary policy.
The ECB also plans to keep its key interest rates unchanged throughout 2019.
The news came in the same week that China cut its economic expansion target, the Bank of Canada lowered its expectations for policy tightening and the Organisation for Economic Co-operation and Development slashed its global outlook again, causing more concerns about the slowdown in the global economy.
The U.S. Dollar Index that tracks the greenback against a basket of six other major currencies dropped by 0.05% to 97.518.
U.S. non-farm payrolls for February, to be released later on Friday, will indicate the strength of the labour market.
Reuters says economists expect to see 180,000 jobs added in the country last month, after two months of staggering growth. The U.S. economy added 304,000 jobs in January and 222,000 in December.
“Whether the dollar can remain on an uptrend in the long-term is debatable, but for now a strong U.S. jobs report would provide further boost for the currency,” Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo, told Reuters.
On another note, Bloomberg reported on Wednesday that U.S. President Donald Trump is pushing U.S. negotiators to close a Sino-U.S. trade deal soon.
The USD/CNY pair inched up by 0.09% to 6.7190. The People's Bank of China (PBOC) set the yuan reference rate at 6.7235 vs the previous day's fix of 6.7110.
The USD/AUD pair lost 0.02% and stood at 1.4246. Australia’s GDP growth data came in at 0.2%, below the 0.3% expectation. The slower growth has contributed to the anticipation of a rate cut this year. The Australian dollar also took a hit last month after the RBA stepped back from a long-standing tightening bias.
Elsewhere, the USD/JPY pair was down 0.11% to 111.45 amid risk aversion in broader markets. Market turmoil tends to send the safe-haven yen up.
The USD/NZD pair also slid 0.12% to 1.4784.