Forex News: Euro Rises As Traders Await ECB Policy Decision

Euro Rises As Traders Await ECB Policy Decision

(RTTNews) - The euro strengthened against other major currencies in the European session on Thursday, as investors await the European Central Bank's (ECB) monetary policy announcement due later in the day.

Following a 25-basis point (bp) increase at the June policy meeting, the ECB is anticipated to maintain policy rates unchanged.

As a result, investors will closely monitor the monetary policy statement and comments made by ECB President Christine Lagarde during the press conference concerning the inflation outlook and monetary policy.

According to some media reports, the ECB is expected to raise interest rates twice more this year. Investors want to know if concerns about inflation's second-round consequences on the Eurozone economy are genuine.

Fabio Panetta, the governor of the Bank of Italy and an ECB policymaker, stated in the middle of the month that the central bank's objective is to limit the indirect and second-round consequences of shocks while keeping inflation expectations firmly anchored.

Meanwhile, traders seemed reluctant to make significant moves amid concerns about the escalating Middle East conflict between the U.S. and Iran and the related surging crude oil prices after shipping traffic across the Strait of Hormuz has vastly diminished.

The conflict between the U.S. and Iran shows no signs of letting up. The U.S. Central Command said it successfully completed the 12th consecutive evening of strikes against Iran.

In the European trading today, the euro rose to a 9-day high of 0.8543 against the pound, from an early low of 0.8530. The euro is likely to find resistance around the 0.87 region.

Against the U.S. and the New Zealand dollars, the euro advanced to a 3-day high of 1.1436 and an 8-day high of 1.9661 from an early lows of 1.1410 and 1.9614, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.15 against the greenback and 2.02 against the kiwi.

Against the Swiss franc and the yen, the euro climbed to a 6-month high of 0.9306 and nearly a 3-month high of 186.48 from early lows of 0.9291 and 186.11, respectively. The next possible upside target for the euro is seen around 0.94 against the franc and 188.00 against the yen.

Looking ahead, Canada retail sales data for May, U.S. Chicago Fed national activity index for June, U.S. weekly jobless claims data and Eurozone consumer confidence for July are slated for release in the New York session.

At 8:15 am ET, the European Central Bank's (ECB) monetary policy decision is set to be announced. The ECB is expected to keep policy rates steady.

Half-an-hour later, the ECB President Christine Lagarde will speak at a press conference about the inflation outlook and monetary policy.

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