Investing.com - The euro rebounded against the dollar on
Wednesday after investors priced in the likelihood the European
Central Bank will loosen policy in June and snapped up
nicely-priced positions in the single currency.
In U.S. trading, EUR/USD was up 0.09% at 1.3714, up from a
session low of 1.3698 and off a high of 1.3731.
The pair was likely to find support at 1.3689, Tuesday's low,
and resistance at 1.3994, last Thursday's high.
Markets are prepared for the European Central Bank to either cut
rates, implement fresh stimulus measures or a combo of both next
Reuters reported earlier that the ECB is preparing a "package of
measures" including cuts to all interest rates, with negative rates
on bank deposits to encourage lending to small and medium-sized
businesses to spur recovery.
A day earlier, the Wall Street Journal reported the German
central bank Bundesbank would back monetary easing measures,
including a negative rate on bank deposits and purchases of
packaged bank loans, if such tools were needed to keep persistently
low levels of inflation from becoming entrenched in the euro
Last week, ECB President Mario Draghi said monetary authorities
were "comfortable" with acting at its next meeting in June.
By afternoon trading on Wednesday, the euro rebounded on demand
from bottom fishers, as easing measures aren't a surprise after
months of soft inflation rates and other euro zone data.
Elsewhere, industrial production in the euro zone fell in line
with expectations in March, though the soft numbers underlined
concerns over the outlook for economic growth in the single
currency bloc, official data showed on Wednesday.
In a report, Eurostat, the European statistics agency, said
industrial production declined by 0.3% in March, in line with
forecasts. Industrial production in February rose 0.2%.
Year-on-year, industrial production fell 0.1% in March,
disappointing expectations for a 1.0% gain and after rising at a
rate of 1.7% in the preceding month.
Meanwhile in the U.S., producer price inflation rose more than
expected in April, while core wholesale prices also topped
forecasts, official data showed on Wednesday.
The Commerce Department reported earlier that producer prices
increased by 0.6% last month, beating forecasts for a 0.2% gain,
after rising 0.5% in March.
Year-over-year, the producer price index rose 2.1% in April,
beating expectations for a 1.7% increase and up from 1.4% in the
The core producer price index advanced 0.5% last month, compared
to expectations for a 0.2% increase, after rising 0.6% in
Core produces prices rose at an annualized rate of 1.9% in
April, beating forecasts for a 1.4% gain and after climbing 1.4% in
the preceding month.
The Federal Reserve views core prices as a better gauge of
longer-term inflationary pressure because they exclude the volatile
food and energy categories.
The euro was up against the pound, with EUR/GBP up 0.33% to
0.8171, and down against the yen, with EUR/JPY down 0.40% at
On Thursday, the euro zone is to publish preliminary data on
first quarter GDP, as well as revised data on consumer
The U.S. is to release data on initial jobless claims, consumer
inflation and industrial production, as well as a report on
manufacturing activity in the Philadelphia region.
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