Euro nears one-month lows as caution grows

Reuters London | Updated on April 08, 2019 Published on April 08, 2019

Representative image   -  Reuters

The euro sat near a one-month low hit last week as investors grew cautious about the outlook for the currency before a European Central Bank meeting this week.

Traders cut their long euro positions by their biggest margin in nine months last week, according to weekly positioning data, as core European bond yields entered negative territory and as PMI data indicated a euro zone economy struggling to gain traction.

“We are seeing more euro scepticism in the market as expectations of an ECB rate hike has changed from the foreseeable future, with no firm timeline in sight,” said Ulrich Leuchtmann, a currency strategist at Commerzbank in London.

While the single currency was slightly higher on the day at $1.1228, it remained within striking distance of a one-month low of $1.1183 hit last week.

No policy changes are expected at this week's ECB meeting, but the press conference afterwards will be in sharp focus amid talk of tiered rates to ease pressure on banks, global recession fears and a sense of alarm that pushed 10-year German bond yields below zero per cent for the first time since 2016.

Risk appetite was broadly muted across the currency markets, with the yen stronger and the Australian dollar weaker, as concerns about the outlook for the global economy weighed on sentiment.

The dollar was also weighed down by softening bond yields. The greenback was 0.3 per cent lower at 111.385 yen, after briefly popping up to a three-week high of 111.825 on Friday following the US jobs report.

The Australian dollar dipped 0.1 per cent to $0.7095 in the wake of declining prices of commodities such as copper.

The pound held near a one-week low as France and the Netherlands expressed doubt about May's plan to further delay Brexit. Sterling last traded at $1.3050 for a gain of 0.1 per cent.





Published on April 08, 2019

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill.

In these difficult times, we, at BusinessLine, are trying our best to ensure the newspaper reaches your hands every day. You can also access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all our readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. You can help us by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section.

Our subscriptions start as low as Rs 199/- per month. A yearly package costs just Rs. 999 – a mere Rs 2.75 per day, less than a third the price of a cup of roadside chai..

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor