The Euro remained steady in the wake of a hard fall after the ECB yesterday acknowledged that the Eurozone economy needed additional stimulus in order to push itself from the low growth and low inflation trend in which it had become mired. The ECB laid out its plan which included a whole host of interest rate reductions, one of which would bring overnight deposits at the ECB into negative, essentially a fee to banks to park their money with the ECB. Mario Draghi pledged that the ECB would do what was within its power to avoid a Japan-like scenario of a lost a decade.
As reported at 1:15 p.m. (JST) in Tokyo, the EUR/USD recovered from yesterday’s low t $1.3503 and was holding steady at $1.3659. Some FX traders believe that with the ECB decision now a thing of the past that the Euro’s downside could be limited however BNP Paribas analysts said in a client note that they recommend the Euro be sold at $1.3620 with a possible target likely at $1.3200.
NFP Range Estimates Widen
The U.S. Dollar Index lost ground and was trading at 80.349 .DXY, moving off yesterday’s 4-month high at 81.020 .DXY. The U.S. Dollar could be under some pressure today as investors await the release of critical private sector labor data. Last Wednesday’s ADP release was a disappointing surprise and analysts’ estimates for new jobs is broader than typical, with numbers ranging from 110,000 new jobs added to as high as 325,000.