The euro traded higher against its most major rivals in European deals on Tuesday, after the European Central Bank said that banks in the euro area eased lending standards in the third quarter, reflecting that quantative programme is showing impact in economy.
Credit standards on loans to enterprises eased further in the third quarter, which was stronger than the previous survey round’s expectations, the ECB’s Bank Lending Survey showed. The net percentage of banks reporting easing of credit conditions on loans to firms was -4 percent, higher than -3 percent recorded in the second quarter.
For the current quarter, “banks expect a further net easing in credit standards on loans to enterprises.”
Regarding the impact of the ECB’s expanded asset purchase programme, banks reportedly used additional liquidity from the programme to grant loans over the past six months, it said.
Consequent to the APP, a slightly positive net percentage of banks reported an increase in profitability over the past six months, though a marginally negative effect is expected over the next six months, the survey added.
In other economic news, preliminary data from Destatis revealed that Germany’s producer prices declined at the fastest pace in seven months and the fall was much worse than the decrease economists had predicted.
The industrial producer price index dropped 2.1 percent year-on-year following a 1.7 percent slump in August. Economists had expected a 1.8 percent fall.
The euro was modestly higher against the greenback, franc and the yen in the Asian session. Against the pound, it held steady.
The euro advanced to a 4-day high of 1.1387 against the greenback, up by 0.57 percent from an early low of 1.1323. If the euro extends rise, it may locate resistance around the 1.15 region.
Rebounding from an early low of 135.26 against the yen, the euro firmed to a 5-day high of 136.22. The euro is seen finding resistance around the 137.00 area.
The single currency reached as high as 0.7356 against the Sterling, a 0.59 percent increase from a low of 0.7313 hit at 3:00 am ET. Continuation of the euro’s uptrend may take it to a resistance surrounding the 0.75 level.
The common currency advanced to a 5-day high of 1.4814 against the Canadian dollar, off its prior low of 1.4729. The euro may challenge resistance near the 1.50 zone.
The 19-nation currency recovered to 1.5630 against the aussie, after having fallen to 1.5542 at 3:45 am ET. The next possible resistance for the euro is likely seen around the 1.58 mark.
On the flip side, the euro weakened to a 4-day low of 1.0797 against the Swiss franc, and held steady thereafter. The pair ended Monday’s trading at 1.0827.
Figures from the Federal Customs Administration showed that Swiss foreign trade surplus increased in the three months ended September.
The trade surplus rose to CHF 9.420 billion in the third quarter from CHF 9.367 billion in the previous three-month period.
Looking ahead, Canada wholesale sales data for August and U.S. housing starts and building permits, both for September, are slated for release in the New York session.
At 9:00 am ET, Federal Reserve Bank of New York President William Dudley is expected to speak about “The Evolving Structure of the U.S. Treasury Market” in a conference hosted by the Federal Reserve Bank of New York. Federal Reserve Governor Jerome Powell will also deliver opening remarks at the same conference.
The material has been provided by InstaForex Company – www.instaforex.com