Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Forex - Euro Drifts Ahead of Brexit Summit, ECB Meeting

Published 04/10/2019, 02:32 AM
Updated 04/10/2019, 02:32 AM
© Reuters.

© Reuters.

Investing.com -- The euro edged higher against the dollar and was little changed against sterling in early trade in Europe on Wednesday, with two big diary events looming large over the market.

At 04:00 AM ET (0800 GMT), the euro was at $1.1271, up around 0.1% from late Tuesday in Europe. The pound was at $1.3076 against the dollar and 1.1602 against the euro, still stuck in the tight range of recent sessions.

The dollar index, which measures the greenback against a basket of six major currencies, was at 96.565, down fractionally from late Tuesday.

The emergency European Union summit on Brexit appears likely to agree some form of extension to the U.K.’s date for leaving the bloc, but the terms it will require are still uncertain, after U.K. Prime Minister Theresa May’s visits to Paris and Berlin on Tuesday failed to gain approval for her proposal of a short delay until June 30.

“The European Union is in no mood to force a hard Brexit, whatever the chatter,” Marc Ostwald, strategist at ADM ISI in London, wrote in a note to clients on Tuesday.

The day’s other big event in Europe is the European Central Bank’s regular meeting, brought forward by a day to allow policymakers to get to Washington DC in time for the International Monetary Fund’s spring meeting.

On Wednesday, the IMF cut its forecast for world growth this year to the lowest since 2009, a mere 3.3%, due not least to a slowdown in the euro zone that the ECB is under pressure to stop.

No policy action is expected this week, but market participants will be anxious to hear more detail about the possibility of ‘tiering’ the penalty rate on deposits at the ECB, a step that would allow the bank to cut its official interest rates again without hurting the already weak profitability of euro zone banks. They’ll also want to hear more about the new long-term loans that are due to start in September, and about whether the ECB wants to use them to increase overall liquidity (thereby loosening monetary conditions), or merely to stop it falling.

Elsewhere, the dollar drifted lower against the Aussie and kiwi overnight, and was also off recent highs against the Turkish lira ahead of an important update on policy reform by Finance Minister Berat Albayrak.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.