The euro fell a bit versus some rivals but was about flat versus most of them on Tuesday. That was a surprisingly good performance considering that eurozone macroeconomic data released during Tuesday’s session was universally bad. The monetary policy outlook was also negative for the currency.
French payrolls employment rose by 0.2% in the second quarter of 2019, slowing from the first quarter’s 0.4% rate of growth and missing the average forecast of a 0.3% increase. French industrial production increased by 0.3% in July after sinking 2.3% in the previous month but failed to meet the consensus forecast of a 0.5% increase. Italian industrial production fell by 0.7% in July, exceeding the previous month’s drop of 0.3% and the forecast decline of 0.1%.
The European Central Bank will make its monetary policy decision on Thursday. The general consensus is that the central bank will make the policy more accommodative, either by cutting interest rates or by renewing asset purchases. It is also possible that the ECB will use both methods. Indeed, National Bank of Canada analysts predicted an interest rate cut by 20 basis points and also a reintroduction of quantitative easing, though they warned that the size of the asset purchase program is likely to be limited:
The size of the package is likely to be limited though; anything more than â¬40 billion a month looks improbable.
Some experts think, though, that it is possible for hawks to win the day, and the ECB may yet disappoint markets.
EUR/USD traded at 1.1048 as of 22:14 GMT today after opening at 1.1047. EUR/GBP was at 0.8943 after opening at 0.8947. EUR/CHF was down from 1.0959 to 1.0916 intraday but bounced to 1.0953 by the session’s close. EUR/JPY managed to gain from 118.45 to 118.79.
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