The euro recovered from its early lows in New York deals on Thursday, after the European Central Bank President Mario Draghi maintained the quantitative easing program at EUR 60 billion a month, while raising the Emergency Liquidity Assistance limit to Greek banks.
In his press conference at Frankfurt, Draghi said that its monthly asset purchases of EUR 60 billion are intended to run until the end of September 2016 or until the bloc attains the ECB’s inflationary goal of below, but close to, 2 percent over the medium term.
Draghi noted that downside risks to economic growth had been contained as a result of monetary policy measures, as well as oil price and exchange rate developments.
Draghi lifted up the ELA limit by 900 million euros over one week, and hinted that Greece could get benefit from its quantitative-easing scheme, depending upon repayments owed to the central bank.
Meanwhile, the Eurogroup approved a new 3-year bailout to Greece, conditional upon the completion of relevant national procedures. The finance ministers agreed to extend EUR 7 billion bridge loan to Greece from the European Financial Stability Mechanism, which would allow the country to make a EUR 3.5 billion repayment on Monday.
The euro had been lower since today’s Asian trading following the news that Greek lawmakers have approved the austerity plan demanded by its creditors. The euro fell 0.59 percent against the pound, 0.59 percent against the U.S. dollar and 0.17 percent against the Swiss franc yesterday.
In New York trades, the euro was trading at 135.34 against the yen, coming off from an early 6-day low of 134.74. The euro is likely to find resistance around the 136.00 zone.
After falling to nearly a 2-month low of 1.0854 against the greenback in previous deals, the euro rebounded with the pair trading at 1.0925. If the euro extends rise, 1.10 is possibly seen as its next resistance level.
Data from the National Association of Home Builders showed that homebuilder confidence in the U.S. is at its highest level in almost ten years in the month of July.
The report said the NAHB/Wells Fargo Housing Market Index came in at 60 in July, unchanged from the upwardly revised reading for June.
The single currency bounced off to 0.6996 versus the Sterling, following a 7-1/2-year decline to 0.6962 a short while ago. On the upside, 0.705 is likely seen as the euro’s next resistance level.
The 19-nation currency ticked up to 1.0424 against the franc, reversing from an early low of 1.0397. Next key resistance for the euro may be located around the 1.05 zone.
Data from the Federal Statistical Office showed that Switzerland’s retail sales turnover declined in May.
Real turnover declined 1.8 percent in May from last year, following a 0.1 percent drop in April. This was the fifth straight month of decline. Excluding fuel, retail sales slid 1.6 percent annually, in contrast to April’s 0.4 percent increase.
The euro reversed from an early low of 1.4035 against the loonie, edging up to 1.4102. Continuation of the euro’s uptrend may take it to a resistance surrounding the 1.42 mark.
Looking ahead, at 2:00 pm ET, Bank of England Governor Mark Carney is expected to speak at the Resolution Foundation, in Lincoln, England.
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