Loading...
Best Exchange Rates

Home pages - full list (A-Z)

  •  

Asia-Pac Currencies Make Waves Against Euro After ECB Extends Asset Purchases

Currency-News AUD CNY EUR INR JPY MYR NZD SGD THB USD
Email share     Facebook     LinkedIn    Twitter
 

Currencies in the Asia-Pacific region made sweeping gains against the euro on Thursday night after the European Central Bank announced a cautious approach to the removal of monetary stimulus.

Further to a zero percent interest rate, the ECB is currently buying €60 billion worth of assets (bonds) each month, with the goal of keeping eurozone borrowing rates extremely low. The size of this “quantitative easing” (QE) program was halved on Thursday (changes to commence in January) after the bank’s president, Mario Draghi, announced that the first three quarters of next year would see monthly purchases of only €30 billion.

This tapering of the bank’s QE program, which is akin to monetary policy tightening, was largely expected and consequently was outweighed, in terms of influence on foreign exchange rates, by Draghi’s generally dovish remarks.

There will be no “sudden end” to QE, said Draghi, and interest rates in the eurozone will be held at record lows “well past” the as yet undetermined termination date of QE.

As a consequence, the euro tumbled, to the benefit of Asia-Pac.

By Friday morning, the Chinese yuan had climbed to a fifteen-week high against the euro. The yuan’s 1.5% appreciation forced EUR/CNY to 7.719, from rates around 7.835 sixteen hours earlier.

The currencies of the Southeast Asian bloc of Singapore, Malaysia and Thailand all strengthened against the euro to levels unseen since July. Proportionally, the currencies’ gains were similar to that made by the yuan. EUR/SGD, EUR/MYR and EUR/THB fell to 1.591, 4.925 and 38.641 respectively.

One day prior to the ECB meeting, the Japanese yen had fallen to its weakest level against the euro in nearly two years (EUR/JPY 134.50). Thursday’s announcements have of course produced a sharp reversal. The yen strengthened by 1.3% against the euro, driving EUR/JPY down from a pre-ECB rate close to 134.30 to 132.60 on Friday morning. The yen nonetheless remains extremely weak by recent standards. Against the euro, it has lost 18% of its value since June 2016.

For yen traders, attention now turns to Tuesday’s meeting of the Bank of Japan, at which the bank will release its quarterly report on the Outlook for Economic Activity and Prices. At the meeting, no changes to the BoJ’s own QE program or interest rate are expected. The bank’s monthly policy statement is scheduled for 11:50am local time (GMT+9), with a press conference at 2:30pm. No time has been set for the announcement on rates or for the outlook report.

EUR/INR’s 1.6% fall to 75.55 marked the Indian rupee’s strongest level against the euro in nine weeks and also its best one-day performance in sixteen months.

As with the yen, the Australian and New Zealand dollar currencies were staring at long-term lows against the euro (EUR/AUD, EUR/NZD highs) prior to the ECB’s meeting. Each of the currencies has since reversed by more than a percent to respective per-euro rates of 1.5186 and 1.7008.

 

Related Articles

 

Revolut Readies Singapore Launch

Revolut, a digital bank that allows users to receive, send and spend money at the interbank exchange rate, should be ready for its Singapore beta launch in March 2019, the company has said.

22 Feb, 2019 by Joel Wright - Last updated:23 Feb, 2019

Japan Allows Fintech Payments Specialists to Compete with Banks

Japanese Yen JPY Currency News and Forecasts

The Japanese FSA has announced it will finally remove a ¥1 million (US$9,000) cap on cross-border money transfers handled by non-banking entities, paving the way for a major overhaul of Japan’s remittance industry.

21 Feb, 2019 by Joel Wright - Last updated:23 Feb, 2019

Pound at 2-Week High Ahead of May-Juncker Brexit Meeting

The British pound was in high demand on Tuesday ahead of an important meeting between British PM Theresa May and EU officials, at which investors are hoping for a Brexit breakthrough.

19 Feb, 2019 by Joel Wright - Last updated:23 Feb, 2019

Euro to Strike 20-Month Low This Week; $1.12 Beckons

Those intending to pick up euros this week should consider heeding warnings offered by MUFG. The bank expects the euro to move towards cheaper levels in the coming days and it would therefore be unwise to pay rates offered on Monday.

18 Feb, 2019 by Joel Wright

HSBC Cuts Australian Dollar Forecast; Aussie to Buy Only US66¢ at Year-End

The forecast is stormy with the embattled Australian dollar set to lose a further 7 per cent of its value and end the year buying only US66¢, analysts at HSBC have said. A decline into the mid-60s would have the Aussie trading at levels not seen in a decade.

15 Feb, 2019 by Joel Wright - Last updated:20 Feb, 2019

 

This article: Currency-News Tags: , , , , , , , , ,

 
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product. Full Disclaimer

Do NOT follow this link or you will be banned from the site!