Euro Weakens on ECB Comments as U.K. Triggers Brexit Process – 29 March, 2017
The euro fell the most in five weeks on a report that European Central Bank officials are wary of changing their dovish message and after the U.K. set in motion the first withdrawal of a country from the European Union.
The shared currency fell against all but one of its major peers after the Brexit process was triggered. It extended losses after a Reuters report that ECB officials said they are cautious about changing their monetary-policy message before June. The Bloomberg Euro Index was down about 0.5 percent, the biggest drop since Feb. 21.
- EUR/USD was down ~0.5% near 1.0765 after falling as low as 1.0740 and filling bids between 1.0740/50 following the ECB report; buying interest near 1.0700 and 1.0660, selling interest near 1.0790 and 1.0830; next major EUR support at multiple DMAs between 1.0675-1.0690.
- Message from ECB’s Governing Council at its March 9 press conference, when it tweaked its policy language, was over-interpreted, Reuters cited one person as saying; the central bank wants to reassure the market that its extraordinary support isn’t yet ending.
- Sterling stabilized near its 100-DMA at 1.2419 after dropping to a one-week low, paring gains of about 4% since mid-March
- U.K. PM May struck a conciliatory tone toward the EU as she coupled her demand for divorce with a request for a sweeping free-trade deal encompassing financial services.
- Mexico’s peso led gains among global peers as Republican Senator Rob Portman said he favors traditional tax reform without a border adjustment tax provision; MXN set for biggest monthly advance since June 2012.
- The Bloomberg dollar index was little changed. San Francisco Fed President Williams and Boston Fed President Rosengren signaledpossible need for faster rate-hike path.
Source: Bloomberg