Mid-Day Report: Euro Lower as Weber Signals No Stimulus Exit Before 2011. Dollar Resumes Rally
Dollar rises sharply today on risk aversion and breaches recent high against Euro, Sterling, Aussie and Canadian. Weakness in global equities was carried through to European session, sending major indices mildly lower while US stocks are also set to open lower as selloff continues. Euro is additionally soft after ECB council member Weber said signaled that the stimulus measures will be in place throughout this year. Meanwhile, Canadian dollar drops sharp after release of tamer than expected CPI data.
ECB Weber said today that discussions about continuation of the exit of stimulus measures will be “focused on the first quarter” while ECB will need to “re-embark on a normalization procedure”. Weber suggested to keep full allotment in weekly, monthly and three-month refinancing operations until after the end of the year, which is “usually surrounded by some uncertainty regarding the liquidity situation.” The comments sent EUR/USD through last week’s 1.2733 low and Germany’s 30-year bond fell to a record low. <