Tags: The euro, Currency:EUR, euro dollar exchange rate, euro pound exchange rate, euro exchange rate, today,
The euro is trading at the midpoint of its post-FOMC range between 1.2804 and 1.3169, with considerable support at the 200 day MA (1.2826).
"Spain has yet to request a bailout, and the IMF suggestion of a rescheduling of repayment terms for Greece has received mixed support. ECB President Draghi stated on October 4th that such an extension would amount to monetary financing. Sweden’s Finance Minister Borg has also renewed discussion of Greek exit, suggesting that such a development could occur over the next six months," says Eric Theoret at Scotiabank.
Concerning the outlook, tomorrow we have CPI and ZEW data releases which are key for near term movement, as the former will help solidify expectations for the ECB’s interest rate policy going for- ward.
"Expectations are for inflation to remain at 2.7% y/y, suggesting limited scope for ECB rate cuts in light of the 2.0% inflation target," says Theoret.
Further supporting the single currency is the broadly positive mood dominating markets.
Markets were lifted by upbeat Chinese trade data and inline PPI and CPI.
M&A news in the telecoms industry together with estimate beating 3Q numbers from Citigroup underpinned the bullish price action, while worries over a Grexit were soothed by comments from euro zone policymakers.
Lastly, better than expected US retail sales and a respectable Empire State manufacturing release this afternoon further supported the tone. Markets are calm, waiting for more US earnings and the EU summit which kicks off at the end of the week.
Corporate news on the whole today injected some positivity with Japan’s Softbank announcing a deal to buy 70% of US telecom carrier Sprint Nextel.
"A week after the collapse of BAE/EADS tie-up, optimism around M&A picking up were dashed by the collapse of that merger however today demonstrates that we are set to see big global players on the acquisition hunt after years of sitting on their cash piles given the European financial crisis," says Ishaq Siddiqi at ETX Capital.
Some faith in deal activity has been restored and we optimistically look for more deal news in the months leading up to the year-end.
Looking at the spot markets we see the euro dollar exchange rate is unchanged at 1.2945.
The euro pound exchange rate is also unchanged at 0.8063.