Euro Rose after ECB Trichet
The euro rose as expectations for a rate hike in May or June increased after the European Central Bank ended its April monetary policy meeting today. The single currency gained against the dollar, and bounced back to around 1.3480 after testing a key psychological barrier at 1.35.
The ECB decided to leave key interest rates unchanged at 3.75% as expected. ECB Chairman Trichet said in the post-meeting press conference, interest rates were accommodative, suggesting the central bank may need to tighten monetary policy further. He said recent data showed the economic growth in the euro zone is stable.
The market tomorrow will focus on US PPI, a key inflation gauge, and University of Michigan Consumer Sentiment Index.
EURUSD will face interim resistance at 1.35, followed by 1.3520 and 1.3550. Additional ceilings will emerge at 1.3580, backed by 1.36. Support starts at 1.3450, backed by 1.3420, 1.34 and 1.3370. Subsequent floors are eyed at 1.3350.
GBPUSD encounters interim resistance at 1.98, backed by 1.9820, and 1.9850. Subsequent ceilings will emerge at 1.9880, followed by 1.99 and 1.9930. On the downside, support begins at 1.9760, followed by 1.9730 and 1.97. Additional floors are eyed at 1.9670, backed by 1.9650 and 1.96.
Yen Boosted By Trichet Remarks, Eyes on G7
The yen rose after ECB Trichet said today Japan is growing and foreign exchange rates should reflect fundamentals, raising speculations for a discussion of yen weakness on the G7 meeting to be held on this Friday. The dollar dipped below 119 handle versus the yen following Trichet??™s comments. Traders are sitting back and waiting for any impact this upcoming G7 can have on the yen over the weekend.USDJPY encounters interim resistance at 119.30, backed by 119.50 and 119.80. Subsequent ceilings will emerge at 120, followed by 120.30 and 120.50. On the downside, support begins at 119 and 118.80, followed by 118.50. Additional floors are eyed at 118.30, backed by 118 and 117.70.