With the ECB Keeping Its Policy Rate Unchanged, Should We Be Wary of Further Euro Declines?

With the ECB Keeping Its Policy Rate Unchanged, Should We Be Wary of Further Euro Declines?

12.04.2024

In the U.S. currency market yesterday, the U.S. dollar rose during U.S. trading hours after the number of new U.S. unemployment insurance claims, released yesterday, fell slightly to 211,000 from the previous reading of 221,000.The EUR/USD pair fell from 1.0756 to 1.699. The decline occurred as the pair was capped by the 20-period moving average on the hourly chart. On the 4-hour chart, the EUR/USD price has fallen to just above the -2σ level of the Bollinger Bands, and a similar pattern is evident on the daily chart.

Following yesterday’s announcement of the ECB’s policy rate—which remained unchanged at 4.50%—the euro became the weakest currency among European currencies after the announcement.The euro/yen pair fell in contrast to the movement of the dollar/yen pair, dropping from 164.695 to 163.934. On the 4-hour chart, while the 75-period moving average is providing support on the downside, the price is forming lower highs, so we will be watching closely to see if a recovery occurs during European trading hours.

Today’s schedule includes South Korea’s employment statistics at 8:00, Singapore’s real GDP at 9:00, Japan’s industrial production at 13:30, Sweden’s consumer price index, the UK’s industrial production, the UK’s manufacturing output, and Germany’s consumer price index at 15:00, and France’sConsumer Price Index, at 21:00 India’s Industrial Production, at 21:30 U.S. Import and Export Price Indices, at 22:00 Canada’s Existing Home Sales and U.S. Collins:Boston Fed President’s remarks; at 23:00, the U.S. University of Michigan Consumer Sentiment Index; and at 27:30, U.S. Bostic: Atlanta Fed President’s remarks are scheduled. We will carefully monitor the downside potential for the euro, which fell after the ECB left its policy rate unchanged.