EURUSD nears flat as Traders Awaits ECB Meeting

October 24, 2019, | AtoZ MarketsThe US dollar changed little in Asia on Thursday, as traders remain cautious ahead of key central bank meetings this week and next week. The US dollar index following the greenback versus a basket of other currencies was last traded at 97.203 at 12.42 ET (04.42 GMT), down 0.03%.

EURUSD Fundamental Analysis – 24 October 2019

The central banks of Japan and the US should review their policy next week, while traders are also waiting for the meeting of the European Central Bank scheduled later in the day. No major political announcement is expected. Still, the conference is expected to attract attention as it is the latest of current President Mario Draghi, who will finish his eight-year term at the ECB at the end of the month.

The EURUSD pair edged up 0.1% at 1.1135. Brexit’s evolution continued to make headlines in the UK after Parliament delayed the Brexit government’s plans.

On Tuesday, the Parliament opposed the three-day calendar of British Prime Minister Boris Johnson for the adoption of Brexit legislation. The scene now seems ready to push for a general election before Christmas to break the deadlock. EU will decide whether to extend the deadline of October 31 for the departure of Great Britain. Citing an unnamed EU official, said EU leaders could decide on this delay as early as Thursday.

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The Euro Pauses To Breathe In Brexit’s Limbo, The Dollar Is Stable

The Brexit project entered a new holding trend, while the dollar held steady as traders took a break from Sino-US trade headlines. Foreign exchange markets are also sticking to tight ranges in anticipation of major central bank meetings this week and next week with the eurozone, Japan, and the United States, which must review their policies.

It seems that traders are balancing the current parliamentary shenanigans and the apparent inevitability of a Brexit, said Michael McCarthy. He added that the major’s currency was stable without much news to move the greenback. While trade talks are no longer in the news, there does not seem to be much to boost the dollar one way or the other, he said.

Positive comments from US and Chinese leaders earlier this week regarding the progress made in settling a peace in their trade dispute had rallied the trade-exposed currencies. This trend began to wane as worries about the health of the US economy returned to the fore.

Texas Instruments posted unexpected earnings prospects on Tuesday, regarded by signs of a slowdown in Microsoft Corp.’s Cloud Computing division. The dollar remained stable in Asian trade, slightly up against the Australian and New Zealand dollars, slipping somewhat against the euro. The euro was held at $ 1,1135, with traders betting on manufacturing and services data from the eurozone and the results of a meeting of the European Central Bank, both expected later on Thursday.

Progress in Eurozone manufacturing sector

Small improvements in France, Germany and the euro area as a whole, as well as manufacturing, services, and composite readings, are the consensus expectations, said Ray Attrill, Head of Foreign Exchange Strategy from National Australia Bank, in a note. The euro will be sensitive to deviations from one side or the other.

The ECB will not leave its policy unchanged Thursday, six weeks after the unveiling of a package comprising new purchases of assets worth 20 billion euros per month, a rate cut, and a promise of open the money taps further if necessary.

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