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Euro loses ground, ECB policy decision in focus

business-articlesEuro loses ground, ECB policy decision in focus
  • Euro under pressure ahead of ECB policy announcement
  • Stronger Canadian production boosts CAD 
  • US dollar rallies as inflation shows signs of picking up
 
 
ECB easing likely to extend euro losses
 
Demand for the euro has eased in anticipation of today’s European Central Bank (ECB) policy announcement, with markets bracing for fresh policy easing.
 
However, while a rate cut is expected, if the ECB fails to unveil a new round of quantitative easing the euro could claw back some of its recent losses.
 
As markets expect a distinctly dovish performance from the ECB any signs of cautious optimism could give the euro a boost.
 
 
Canadian dollar vulnerable to house price weakness
 
A solid improvement in the second quarter Canadian capacity utilisation rate offered the Canadian dollar a leg up yesterday.
 
As production within the Canadian economy showed signs of picking up confidence in the growth outlook naturally improved.
 
This positive mood may not last, however, as forecasts point towards another underwhelming new housing price index report.
 
Evidence of weakness within the Canadian housing market could undermine the impact of the production data.
 
 
Signs of stronger inflation boost US dollar
 
Stronger-than-expected US producer price index figures encouraged the US dollar to trend higher across the board on Wednesday.
 
A similarly solid showing from this afternoon’s consumer price index data could see USD exchange rates extend their gains.
 
An uptick in inflation could prompt the Fed to adopt a less aggressive pace of interest rate cuts.
 
 
Upcoming Data:
 
Thursday, 12 September 2019
12:45 EUR European Central Bank Rate Decision
13:30 CAD New Housing Price Index
13:30 USD Consumer Price Index
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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