Views Article – Sharenet Wealth

Europe, Forex

Euro dips on report on ECB inflation goal, dollar flat

* Mnuchin says no change to use of stabilization fund * Pound rises on retail sales gain, plans to avert no-deal Brexit * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Updates market action, changes dateline, previous LONDON) By Richard Leong NEW YORK, July 18 (Reuters) – The euro dipped on Thursday following a report the European Central Bank staff is studying a potential change to its inflation goal, while the dollar was little changed amid bets the Federal Reserve would lower interest rates in two weeks. Sterling rose for a second day, rebounding from a 27-month low against the greenback, on surprisingly strong UK domestic retail sales last month and developments that would make it harder for the next prime minister to force a no-deal Brexit. Trading among major currencies was mostly muted as market players wait to see whether the Fed would lower U.S. rates for the first time in a decade and if it would signal more rate cuts down the road. The futures market implied traders are positioned for at least three rate cuts by year-end, with the first decrease at the Fed’s July 30-31 policy meeting. “If it sounds like it’s one and done, there would be massive repricing,” said Steven Englander, global head of G10 FX research at Standard Chartered. “That would be hard for the market to digest.” At 11:20 a.m. (1520 GMT), an index that tracks the dollar against a basket of currencies was down 0.07% at 97.152. The dollar did not budge after U.S. Treasury Secretary Steven Mnuchin told Bloomberg earlier Thursday there has been “no change to the dollar policy.” He later told Reuters that there was no change to the use of a $94.6 billion federal fund intended to stabilize currencies during times of market turmoil. There has been speculation whether the White House would intervene to weaken the dollar after U.S. President Donald Trump lashed out at Europe and China earlier this month for what he called their “big currency manipulation game.” The euro dipped against the greenback following a Bloomberg report that the ECB staff are studying a potential change to the bank’s inflation goal of “near 2%.” Such a move would potentially leave the door open for more ECB stimulus to continue for a longer period, which would exert downward pressure on the single currency. The euro hit a session low of $1.1205 before moving to $1.1228, which was nearly unchanged on the day. The dollar fell to a two-week low at 107.620 yen. Sterling strengthened against the greenback after data showed UK retail sales unexpectedly grew 1.0% in June, stoking hopes the economy would avert a downturn in the second quarter. On Thursday, British lawmakers supported proposals to make it harder for the next prime minister to force through a no-deal Brexit by suspending Parliament. The pound was up 0.47% at $1.2489 after hitting a 27-month low of $1.2382 the previous day. The euro was 0.42% lower at 89.9 pence, below a six-month high of 90.15 pence struck on Wednesday. ======================================================== Currency bid prices at 11:21AM (1521 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1222 $1.1223 -0.01% -2.15% +1.1244 +1.1206 Dollar/Yen JPY= 107.7900 107.9400 -0.14% -2.24% +108.0100 +107.6200 Euro/Yen EURJPY= 120.98 121.13 -0.12% -4.15% +121.2300 +120.8000 Dollar/Swiss CHF= 0.9866 0.9873 -0.07% +0.53% +0.9891 +0.9848 Sterling/Dollar GBP= 1.2485 1.2431 +0.43% -2.13% +1.2494 +1.2428 Dollar/Canadian CAD= 1.3083 1.3047 +0.28% -4.06% +1.3095 +1.3041 Australian/Doll AUD= 0.7042 0.7009 +0.47% -0.10% +0.7043 +0.7007 ar Euro/Swiss EURCHF= 1.1074 1.1080 -0.05% -1.60% +1.1089 +1.1061 Euro/Sterling EURGBP= 0.8986 0.9025 -0.43% +0.02% +0.9039 +0.8980 NZ NZD= 0.6751 0.6730 +0.31% +0.51% +0.6752 +0.6730 Dollar/Dollar Dollar/Norway NOK= 8.5973 8.5889 +0.10% -0.48% +8.6086 +8.5779 Euro/Norway EURNOK= 9.6480 9.6395 +0.09% -2.60% +9.6630 +9.6347 Dollar/Sweden SEK= 9.3543 9.3653 -0.13% +4.36% +9.3752 +9.3533 Euro/Sweden EURSEK= 10.4996 10.5132 -0.13% +2.30% +10.5275 +10.4934 (Reporting by Richard Leong in New York and Saikat Chatterjee in London; Editing by Kevin Liffey and Dan Grebler)

© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.