Euro under pressure, ECB minutes eyed

The euro’s downswing continues. EUR/USD had a rough week, losing 1.41%, and is in negative territory on Monday. Currently, EUR is trading at 1.1259, down 20% on the day. Earlier, the euro dropped to 1.1236, its lowest level since July 6th.

ECB minutes could provide hints about December meeting

The ECB releases its minutes of the November policy meeting on Thursday, and the minutes could provide some clues regarding the Pandemic Emergency Programme (PEPP) and rate policy. ECB policymakers are expected to announce at the December meeting that the EUR 1.85 trillion PEPP will be wound up in March 2022. Investors will be looking for signals about potential interest rate hikes from the December meeting. ECB President Christine Lagarde has dampened expectations about a rate hike before 2023, but if inflation continues to move higher, the ECB will find itself under pressure to bring forward its timeline for a rate hike . The markets will be scrutinizing the minutes to gain some insights about what we might hear from the central bank in December.

In the US, President Joe Biden chose Jerome Powell to head the Federal Reserve for another four years. Powell beat out Lael Brainard for the position. Investors should be pleased with the decision, as it maintains consistency at the Fed at a delicate time, with inflation at a 30-year high and the economy still grappling with the Covid pandemic. The Fed is under pressure to speed up its tapering of bond purchases, and on Friday, Fed Vice Chair Richard Clarida said that policy makers could discuss at the December meeting whether to end QE earlier than expected, due to high inflation and the gains in the job market. Clarida is expected to be replaced by Brainard in February.


 EUR/USD Technical

  • There is support at 1.1201, which has held since July. This is followed by 1.1118
  • There is resistance at 1.1415. Above, there is resistance at 1.1557

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.