Euro Down! ECB Interest Rate Decision.
Traders look ahead in anticipation for European Central Bank’s (ECB) Governing Council, set to meet today at 11:45 NZ time, in Frankfurt. The pressure of the ECB’s monetary policy decision has taken a toll on the Euro. Domestic economic data has not helped with uncertainty growing around inflation rates and the risks of Brexit looming, adding more pressure onto the ECB to cut interest rates.
The Euro is plummeting at a rapid rate, breaking through a key support level at the seven-week low. Fast approaching a monthly support area from lows seen near the end of May.
As writing this, the EUR/USD is trading at 1.11294 and has seen a drop of (-0.08%.).
Looking to fill wicks in the key support we saw at the end of May around the 1.1110 mark. Depending on the result of the stimulus news we will get from Mario Draghi, we could see the support play out and see an increase to the 1.1169 mark. However, as a rule of thumb interest rates and FX currencies generally share an inverse relationship, meaning lower interest rates result in a weaker Euro.
The ECB meeting scheduled to take place in a couple of hours, is a crucial medium-term event for the euro, as is sure to elevate the validity of the European market. We will be keeping a close eye on the ECB meeting and how it will be affecting the Euros movement.
Stay tuned for more updates,