The euro rose sharply against its major counterparts in the New York session on Monday, after the European Central Bank President Mario Draghi struck an optimistic tone about the euro area economy, saying he expects a vigorous pick-up in underlying inflation in the coming months.
Speaking before the Economic and Monetary Affairs Committee of the European Parliament in Brussels, Draghi said that underlying inflation is likely to accelerate further over the coming months as the tightening labour market is pushing up wage growth.
Draghi confirmed a broad-based expansion of the euro area economy, exhibiting high levels of capacity utilisation and tightening labour markets with signs of labour shortages in some countries and sectors.
Draghi reiterated that the interest rates will remain at their current level “through the summer of 2019.”
The currency has already been supported by a data showing better than expected German business confidence in September.
Survey data from Mannheim-based Ifo institute showed that the business sentiment index came in at 103.7 in September, up from forecasts of 103.2.
The current assessment indicator stood at 106.4 in September versus revised 106.5 a month ago. Nonetheless, the score was above the forecast of 106.
The currency has been trading in a positive territory in the European session, with the exception of the pound.
The euro appreciated 0.6 percent to a 4-day high of 1.1322 against the franc, following a decline to 1.1250 at 5:15 pm ET. At last week’s close, the pair was worth 1.1255. The euro is poised to find resistance around the 1.15 level.
The euro spiked up to 1.1815 against the greenback, its strongest since June 14. This represented a 0.8 percent advance from a 4-day low of 1.1724 seen at 2:30 am ET. The euro-greenback pair was valued at 1.1747 when it closed deals on Friday. The euro is seen finding resistance around the 1.20 level.
The single currency extended early gains to 133.07 against the yen, up by 0.9 percent from a 4-day low of 131.90 touched at 2:30 am ET. The euro was trading at 132.23 against the yen at last week’s close. Next key resistance for the euro is seen around the 134.50 mark.
The euro strengthened to a 6-day high of 1.6244 against the aussie, after falling to 1.6134 at 9:30 pm ET. Continuation of the euro’s uptrend may see it challenging resistance around the 1.64 level.
The euro reversed from an early low of 1.7567 against the kiwi, rising to a 5-day high of 1.7727. Further uptrend may take the euro to a resistance around the 1.80 area.
The common currency added 0.7 percent to hit near a 2-week high of 1.5262 against the loonie, from a low of 1.5160 set at 5:15 pm ET. The euro is likely to test resistance around the 1.54 region, if it rallies again.
The euro bounced off to 0.8980 against the pound, from a low of 0.8935 seen at 8:30 am ET. The next possible resistance for the euro is seen around the 0.92 region.
The Industrial Trends Survey from the Confederation of British Industry showed that UK manufacturing orders deteriorated in September as export order books faded a little.
The total order book balance fell to -1 percent in three months to September, in contrast to the forecast of +4 percent. The export order book balance stood at +5 percent.