Euro gains as ECB’s Villeroy warns of currency weakness


The euro rose against its major counterparts in Monday’s European session, following comments by European Central Bank Governing Council member Francois Villeroy de Galhau that a weak common currency would work against the target. price stability.

The ECB would closely monitor the evolution of the effective exchange rate, as an important driver of imported inflation,” Villeroy told a conference at the Banque de France.

“A euro that is too weak would run counter to our objective of price stability.

Villeroy has signaled that he expects a decisive policy meeting in June and an active summer on the monetary policy front.

The pace of further steps will depend on real activity and inflation data with some option and a gradual nature, but the central bank should at least move towards the neutral rate, he said.

Over the weekend, ECB policy chief Pablo Hernández de Cos said the central bank should decide at its next meeting whether to end the APP program in July and then raise interest rates immediately. .

German bond yields rose, with the 10-year German Bund yield hitting 1.002%.

The euro climbed to 1.0436 against the greenback, hitting a 4-day high. If the EUR continues to rise, it could probably look for resistance around the 1.08 level.

The euro hit 4-day highs of 135.04 against the yen and 0.8534 against the pound, up from an early low of 133.74 and near a 2-week low at 0, 8471, respectively. The currency should face resistance around 137.00 against the Yen and 0.88 against the Pound.

The euro strengthened to a 5-day high of 1.0489 against the franc, after falling to 1.0410 at 5:45 p.m. ET. On the upside, 1.07 is perhaps seen as its next resistance level.

Against the loonie, the euro hit a high of 1.3502, after a low of 1.3418 reached at 7:45 p.m. ET. The Euro could possibly challenge the resistance around the 1.38 level.

The EUR was stable against the Kiwi, after hitting a 4-day high at 1.6687 in the Asian session, reversing from a 1-week low at 1.6527. At Friday’s close, the pair was trading at 1.6544.

The euro advanced to 1.5118 against the Aussie in the previous session, from a one-week low at 1.4962, and was flat thereafter. The pair had closed Friday’s offers at 1.4995.

Looking ahead, Canadian housing starts for April are set to be released at 8:15 a.m. ET.

The New York Fed Empire Manufacturing Survey for May, Canadian Wholesale and Manufacturing Sales for March will be featured in the New York session.

At 10:00 a.m. ET, Bank of England Governor Andrew Bailey and members of the MPC will testify on monetary policy before Parliament’s Treasury Committee.

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