Today’s focus will be on the ECB’s monetary policy meeting, where no change is expected to the policy settings underplaying worries over recent softness in the euro zone economy. Markets are looking forward to seeing whether recent Euro sell-off and its trading around its lowest level since mid-January against the greenback rendering it undervalued ahead of the European Central Bank’s policy update. The ECB decision is due at 1145 GMT and president Mario Draghi will begin his press conference at 1230.
French President Macron urged the United States on Wednesday not to withdraw from the JCPOA (Iranian nuclear deal) under which Iran agreed to curb its nuclear activities in exchange for the lifting of economic sanctions as Britain, France and Germany were nearing a package that seeks to persuade U.S. President Donald Trump to save the accord who described it as the worst deal ever negotiated and has threatened to reimpose U.S. penalties in May unless the three European allies agree to fix its “flaws”.
Aluminum price declined again on Thursday, after breaking a four-day losing streak in the previous session, as the deadline extension to comply with U.S. sanctions on Rusal flattened prices; the Russian aluminum giant accounts for 7% of global metal supply, thus threatened sanctions left the market fearing a supply shortage.
Oil rose on Thursday, as traders overlooked surprise increases by 2.2 million barrels for the week ended April 20 – almost 10 million barrels above the five-year average – in U.S. supplies which were reported by the U.S. Energy Information Administration; instead market focused on the possibility that Trump will reimpose sanctions against Tehran, the concerns over supply disruptions in Venezuela and the Middle East, as well as by strong demand.
Gold nears 5-week lows as US Dollar reigns while there was a rise in U.S. Treasury yields above 3 percent. Gold prices stuck to a narrow range on Thursday, due to further increase in Treasury yields, making the precious metal relatively less attractive.
US Dollar remains very firm, being higher once more against a basket of major currencies, with rising US Treasury yields still helping. ECB will likely leave both monetary policy and its communication unchanged today, favoring further downside in the EURUSD pair. Furthermore, a stronger dollar and further losses for EURUSD are likely to be registered as the yield on the benchmark 10-year US Treasury note keeps rising.
Euro edges off eight-week lows ahead of Thursday’s ECB meeting. The single currency slightly rose but remains 2-1/2 cents off levels hit only last week, raising questions whether the euro’s rally since last year had come to an end.
Sources: Reuters, Investing.com, CNBC
PLEASE NOTE The information above is not investment advice.