Euro Edges Higher Ahead of ECB Meeting

EUR

The Euro recovered from previous losses incurred against other rivals as market participants await key economic events. The latest developments on the Brexit front and the US-Sino trade truce eased concerns over the global economic outlook and backed the shift towards riskier currencies such as the euro and pound. As for today, the preliminary manufacturing and services PMI could have a significant impact on the market, while the ECB is widely expected to remain on hold with Draghi expressing a slightly dovish tone on his last meeting as the ECB president. The EURUSD is currently trading above $1.1150, and the EURJPY edged higher to 121.30.

GBP

The British pound bounced off the lows as market participants await the EU's response on the deadline extension. On Tuesday, the UK parliament approved the Withdrawal Agreement Bill but failed to agree on a tight timetable. The EU will have to decide on the extension, either providing a technical extension (a couple of weeks) or a long extension (January 31, 2020). The GBPUSD rose to $1.2950, and the GBPJPY rallied to 140.74.

USD

The dollar index, which measures the greenback against a basket of major currencies, faltered at 97.65 and dropped to 97.33 as the European currencies regained strength. The euro and pound account for almost 70% of the dollar index basket. Market participants are looking forward to the speech of the US Vice President Mike Pence on trade.

Metals

Gold prices continued to trade in a tight range awaiting fresh fundamental drivers. The price of a gold ounce is finding resistance slightly below the $1500 level and support around $1480 level, the price of a silver ounce is currently trading near $17.50, while palladium plunged to a one-week low of $1735.

Oil

Oil prices soared to a three-week high on a shortfall in US crude inventories. The US Energy Information Administration reported that the US weekly crude oil inventories fell by 1.699 million barrels last week. The West Texas Intermediate crude futures raced higher to $56.04, and Brent futures climbed to a high of $61.27. Oil prices will be subjected to the speech of the US Vice President Mike Pence on trade later today.

Major Economic Events

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