|

ECB Boosts the Euro

EURUSD

The ECB Economic Bulletin suggests that the Central Bank keeps seeing an ongoing expansion in the economy but with increased downside risks. This is despite signs of moderating momentum, while global economic activity next year is expected to decelerate, with the announcement indicating that geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent.

The Bulletin confirms that the key ECB interest rates will remain unchanged at least through the summer of 2019, while also noting that this could be “as long as necessary” to ensure that inflation remains close to, but below, 2% over the medium term. In addition, the Bulletin reaffirms that QE will end in December 2018.
 
Markets have reacted positively to these comments, as worries regarding growth appear to be mostly external to the Euro Area. Given that the rest of the world appears to have been caught in a trade war or in other types of uncertainty and tensions, the Euro Area, having resolved the Italian budget issue, and with a plan regarding the possibility of a cliff-edge Brexit deal, internal prospects appear to be better than ever before, at least in the last 10 years.
 
The Euro broke above the 200-period moving average earlier today, as the Bulletin was announced and the question now is whether it will be able to maintain its gains. The EURUSD pair has not managed to break through the 38.2% Fib. level, at 1.1397, although the major Support level currently stands at 1.1386, at the 200-period MA level.

Author

Dr. Nektarios Michail

With more than 4 years of experience at the Central Bank of Cyprus where he obtained hands-on experience with real-life economics, Dr Nektarios Michail is a supporter of a balanced approach between science and art when it comes to

More from Dr. Nektarios Michail
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD clings to daily gains around 1.1630 ahead of Fed

EUR/USD manages to regain the smile on Wednesday, advancing marginally to the 1.1630 zone after four consecutive daily pullbacks, all amid the reneweed offered stance in the           US Dollar prior to the FOMC event. The Fed is largely anticipated to trim its interest rates by 25 bps.

GBP/USD looks bid above 1.3300, eyes on the Fed

GBP/USD sets aside two daily declines in a row and trades with modest gains just above 1.3300 the figure on Wednesday. Cable’s better tone comes on the back of some selling pressure hurting the Greenback prior to the FOMC event. Next on tap across the Channel will be the GDP figures on Friday.

Gold appears sidelined around $4,200 ahead of FOMC event

Gold trades slightly on the back foot on Wednesday amid a weaker US Dollar and the continuation of the upside momentum in US Treasury yields across the curve. The precious metal remains cautious ahead of the expected 25 bps rate cut by the Fed and the release of the updated “dots plot”.

Federal Reserve expected to cut interest rates as disagreement among officials grows

The United States (US) Federal Reserve (Fed) will announce its interest rate decision on Wednesday, with markets widely expecting the US central bank to deliver a final 25 bps cut for 2025.

Crypto Today: Bitcoin, Ethereum hold steady as XRP struggles ahead of Fed rate decision

Bitcoin holds above $92,000, supported by ETF inflows and hopes of a potential Fed interest rate cut. Ethereum rises above the 50-day EMA as the MACD and RSI signal a bullish turnaround. XRP trades under pressure as sellers target $2.00 support despite mild ETF inflows.

Zcash Price Forecast: ZEC extends gains as derivatives turn decisively bullish

Zcash (ZEC) price extends gains, trading above $440 on Wednesday after rallying nearly 30% so far this week. ZEC’s rising open interest, elevated bullish bets, and a shift to positive funding rates all point to stronger demand.