6 Nov 2013
EUR/USD rebounds on reduced ECB cut bets
FXstreet.com (London) - The euro has gained this morning on reduced bets that the European Central Bank will move to further cut rates or announce a further LTRO.
The common currency came under heavy selling pressure last week after weak inflation numbers and continuing high unemployment numbers fuelled speculation that the ECB would move to cut interest rates from their already-low 0.5 percent level.
Eurozone composite inflation printed at 0.7 percent versus a consensus estimate 1.1 percent, while Eurostat upward revised previous unemployment numbers to 12.2 percent from 12.0 percent, undoing optimism of a recovery in European labour markets.
EUR/USD fell from highs above USD1.3800 before the inflation numbers to close last week below 1.3500.
The pair climbed to highs at USD1.3529 today on a changing view that the ECB will hold its main refinancing rate when it meets tomorrow.
The gains were aided by better than expected Eurozone PMI numbers, with the composite services industry index coming in at 51.6, above the 50.9 expectation.
It is now expected that the ECB will hold rates pending further data, but will leave the door open for a further cut or intervention.
The common currency came under heavy selling pressure last week after weak inflation numbers and continuing high unemployment numbers fuelled speculation that the ECB would move to cut interest rates from their already-low 0.5 percent level.
Eurozone composite inflation printed at 0.7 percent versus a consensus estimate 1.1 percent, while Eurostat upward revised previous unemployment numbers to 12.2 percent from 12.0 percent, undoing optimism of a recovery in European labour markets.
EUR/USD fell from highs above USD1.3800 before the inflation numbers to close last week below 1.3500.
The pair climbed to highs at USD1.3529 today on a changing view that the ECB will hold its main refinancing rate when it meets tomorrow.
The gains were aided by better than expected Eurozone PMI numbers, with the composite services industry index coming in at 51.6, above the 50.9 expectation.
It is now expected that the ECB will hold rates pending further data, but will leave the door open for a further cut or intervention.