FOREX-Euro near seven-week lows before PMI data release

Published 24/01/2020, 09:27
© Reuters.  FOREX-Euro near seven-week lows before PMI data release
DXY
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* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee

LONDON, Jan 24 (Reuters) - The euro held near seven-week

lows on Friday after the European Central Bank struck a more

dovish tone at Thursday's meeting than some had expected.

Investor attention will turn to the flash PMI releases for

January, which are some of the first indicators of how the

global economy has performed moving into 2020.

The key data, the euro zone and German PMI figures, are

expected to rise from previous readings. Higher-than-expected

readings could trigger a rally.

The euro fell against the dollar EUR=EBS , to $1.1049. It

was near a five-week low against the British pound EURGBP=D4

and 33-month low against the Swiss franc EURCHF= .

"Sentiment has steadied overnight as evident from the Swiss

franc's weakness against the euro and the dollar with markets

firmly focused on the PMI data," said Thu Lan Nguyen, a FX

strategist at Commerzbank based in Frankfurt.

ECB President Christine Lagarde told a news conference after

Thursday's meeting that risks to euro zone growth remained

tilted to the downside. Markets took her tone as dovish.

"Some people were hoping that Lagarde could talk about the

possibility of policy normalisation after Riksbank ended

negative interest rates late last year. But there was absolutely

no such indication from her," said Kazushige Kaida, head of

foreign exchange at State Street Bank.

Riksbank, the central bank of Sweden, ended five years of

negative interest rates last month, despite a slowdown in the

Swedish economy. The dollar index .DXY held at 97.717 and was on track for

a third consecutive week of gains.

The Australian dollar traded at $0.6843 AUD=D4 , erasing

the gains made after a strong jobs report the day before and

heading for a fourth consecutive week of losses.

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