Euro suffers against majors as investors unwind positions

Headlines

  • Pound higher vs euro ahead of 'Super Thursday'
  • Euro suffers against majors as investors unwind positions
  • Dollar steady against basket of currencies
  • Kiwi dollar hits 4 week lows after RBNZ kept rates steady

GBPUSD 1.3901 GBPEUR 1.1321 EURUSD 1.2279 USDCAD 1.2563 GBPINR 89.24 GBPAUD 1.7732 GBPAED 5.105

Poun

  • Sterling is firmer against the single currency overnight on a broad based up-tick in the pounds favour as the euro was sold off against the dollar. Above today’s high, we look for resistance at Monday’s high at €1.1346 and Friday’s high at €1.1417. On the downside 1.1307, €1.1236 and yesterday’s low at €1.1220 are in focus before. Against the dollar, cable was slightly firmer overnight as traders prepare for today’s BoE Super Thursday where we will get BoE rate decision, BoE Minutes and the BoE Quaterly Inflation Report . Beyond today’s low we look for support at yesterday’s low of $1.3834 and the January 18th low at $1.3803. On the upside 1.4053 and 1.4112 remain in focus.

US Dollar

  • The euro was down against sterling overnight and broadly unchanged against the dollar at $1.2278 but remained not far from its overnight low of $1.2246 and a far cry from last month’s 3-year high of $1.2538. “The euro had recently been too strong, with too many expectations about early policy normalisation of the European Central Bank, and investors are now unwinding those positions,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

Euro

  • The dollar hovered above its recent lows against major rivals on Thursday, benefiting from the euro’s weakness and higher U.S. yields but capped by concerns about recent equity market volatility. Against a basket of six major rival currencies, the dollar was steady on the day at 90.242, not far from Wednesday’s session high of 90.40, its highest in two weeks. The dollar/yen seems to be capped by uncertainty in the equity markets, which will likely keep it in a range. But maybe the equity market downturn won’t last for long, because the world economy is solid. Also, weighing on U.S. debt U.S. congressional leaders on Wednesday reached a two-year budget deal to raise government spending by almost $300 billion. But the battered dollar’s rebound is unlikely to be sustainable even though the Federal Reserve is expected to raise interest rates at least three times this year, according to a Reuters poll of strategists published on Thursda.

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