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ECB News Set to Impact Euro Today
Submitted by Forexyard on Thu, 03/05/2012 - 10:33
The euro tumbled against virtually all of its main currency rivals during yesterday following a worse than expected German Unemployment Change and euro-zone Manufacturing PMI. German unemployment unexpectedly rose by 19K last month.
Analysts had been predicting the figure to decrease by 9K. Meanwhile, the manufacturing PMI dropped to 45.9, its lowest level since June 2009. In addition to taking losses against the USD and JPY, the euro dropped close to 80 pips against the CAD and 75 pips against the AUD during morning trading. Both the EUR/CAD and EUR/AUD staged slight upward corrections later in the day.
Turning to today, significant euro volatility is expected following the Minimum Bid Rate and ECB Press Conference, scheduled for 11:45 and 12:30 GMT. While the ECB is not forecasted to adjust euro-zone interest rates, the press conference is likely to provide clues as to the current state of the region's economic situation. Any indication that further trouble is still to come in the euro-zone could result in losses for the common currency today.
Additionally, a Spanish debt auction may signal just how far Spain still needs to go toward economic recovery after its recent credit downgrade. Should the debt auction disappoint investors, the euro could extend its losses further.