4th Nov 2015 10:08
CANBERA (Alliance News) - The euro weakened against the other major currencies in the early European session on Wednesday, as Eurozone bond yields fell after the European Central Bank President Mario Draghi reiterated that the central bank would re-examine its monetary stimulus in December and is willing to act to maintain monetary policy accommodation.
Speaking at a cultural event in Frankfurt on Tuesday, Draghi said that "Growth prospects in emerging markets and "external factors" are dragging on the outlook for growth and inflation,". The current asset purchases were said to have had "a favorable impact on the cost and availability of credit for firm and households".
Falling energy prices and slowing global trade are making it harder for the central bank to meet its inflation target of just under 2%, he said.
Speculations that the ECB could expand its QE program in December have raised since the European Central Bank meeting two weeks ago. Traders bet for a rate cut possibility at the next ECB meeting, the final one this year, scheduled for December 3.
In other economic news, data from Markit showed that Eurozone services Purchasing Managers' Index rose to 54.1 from 53.7 in September. However, the reading was slightly below flash 54.2. The final composite output index came in at 53.9 in October, marginally below the flash score of 54 but above September's 53.6.
Also, the services PMI for Germany improved to 54.5 from 54.1 a month ago. The flash score was 55.2. The final composite PMI rose marginally to 54.2 from 54.1 in September. It was below flash score of 54.5.
In the Asian session today, the euro held steady.
In the early European trading, the euro fell to nearly a 3-month low of 1.4259 against the Canadian dollar, more than a 2-1/2-month low of 0.7080 against the pound and a 5-day low of 132.28 against the yen, from early highs of 1.4334, 0.7113 and 132.91, respectively. If the euro extends its downtrend, it is likely to find support around 1.40 against the loonie, 0.69 against the pound and 131.00 against the yen.
Against the US dollar and the Swiss franc, the euro dropped to a 6-day low of 1.0916 and a 1-week low of 1.0839 from early highs of 1.0968 and 1.0868, respectively. The euro is likely to find support around 1.08 against the greenback and 1.07 against the franc.
Pulling away from an early 1-week high of 1.6508 against the NZ dollar, the euro slipped to 1.6392. The euro may test support near the 1.61 area. Meanwhile, the euro dropped to a 2-1/2-month low of 1.5148 against the Australian dollar, from an early high of 1.5272 and held steady thereafter.
Looking ahead, at 5:30 am ET, Federal Reserve Governor Lael Brainard will participate in a panel discussion at the European Central Bank in Frankfurt.
In the New York session, US private sector jobs data for October, trade data for September, the ISM US non-manufacturing PMI for October, US weekly Crude oil inventory data and Canada trade data for September are slated for release.
At 8:00 am ET, Federal Reserve Bank of Philadelphia President Patrick Harker is expected to speak on "Why Pay for Success: The Need for New Sources of Social Innovation Capital" before the "Capital for Communities: Pay for Success Financing" event in Philadelphia.
At 10:00 am ET, Federal Reserve Chair Janet Yellen will testify on bank regulation before the House Financial Services Committee in Washington DC.
At 2:30 pm ET, Federal Reserve Bank of New York President William Dudley is expected to speak about the economy in New York.
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