Euro Weak amid ECB Uncertainty

The euro fell against its most-traded rivals today, reversing gains versus the Great Britain pound that were registered earlier during the current trading session. The exception was the Swiss franc, against which against the euro rallied for the fifth straight day, though the gains were small and may yet turn to losses by the end of Thursday’s trading (update: EUR/CHF trades at the opening level currently).

Markets are counting on an announcement of a stimulus reduction from the European Central Bank at the policy meeting scheduled for October 26. Yet ECB Chief Economist Peter Praet argued in his yesterday’s speech that extension of the asset purchase program may be beneficial.

The euro weathered the political crisis in Spain rather well, especially as concerns eased after Catalonia refrained from announcing outright independence. Yet the Catalan story if far from over and may affect markets if significant developments occur.

As for economic data, eurozone industrial production climbed 1.4% in August from the previous month, more than twice the forecast gain. Meanwhile, the French Consumer Price Index fell 0.2% in September from the previous month, a bit more than was predicted by analysts.

EUR/USD traded at 1.1846 as of 16:50 GMT today after opening at 1.1857. EUR/GBP opened at 0.8966, rallied to the daily high of 0.9032, but retreated to 0.8939 later. EUR/CHF was up from 1.1540 to 1.1564, but has retreated to its opening level as of now.

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