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15 Dec 2014
EUR under pressure as 5-yr inflation expectation swap hits record low
FXStreet (Mumbai) - The single currency is slowly extending losses towards 1.24 levels after the European Central Bank (ECB) governing council member Edwald Nowotny’s comments on the inflation pushed the Euro 5-yr inflation expectation swap to record lows.
The EUR/USD pair now trades at the day’s low of 1.2417. Mr. Nowotny said that the inflation in the Eurozone is set to fall further in Q1 2015, which pushed the Euro 5-yr inflation expectation swap at a record low of 1.68. However, losses in the EUR have been restricted since the policy maker said he favors buying bonds in the secondary market, while stating that nobody on the governing council shall approach sovereign QE without conditions.
He also stated that ECB’s efforts will work only if accompanied by fiscal policy steps, while adding that he sees no room to cut rates more. Moreover, his comments are likely to erase the speculation of negative interest rates in the Eurozone.
EUR/USD Technical Levels
The pair has an immediate support at 1.24, under which losses could be extended to 1.2377 (10-DMA). Meanwhile, the resistance is seen at 1.2458 and 1.25 levels.
The EUR/USD pair now trades at the day’s low of 1.2417. Mr. Nowotny said that the inflation in the Eurozone is set to fall further in Q1 2015, which pushed the Euro 5-yr inflation expectation swap at a record low of 1.68. However, losses in the EUR have been restricted since the policy maker said he favors buying bonds in the secondary market, while stating that nobody on the governing council shall approach sovereign QE without conditions.
He also stated that ECB’s efforts will work only if accompanied by fiscal policy steps, while adding that he sees no room to cut rates more. Moreover, his comments are likely to erase the speculation of negative interest rates in the Eurozone.
EUR/USD Technical Levels
The pair has an immediate support at 1.24, under which losses could be extended to 1.2377 (10-DMA). Meanwhile, the resistance is seen at 1.2458 and 1.25 levels.