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Euro holds firm after weekly low point hit

The single European currency managed to avoid declining further on Friday after it hit its weekly low point on Thursday.

The currency was at risk due to the interest rate decision of the European Central Bank, which took place yesterday.

While the Bank did not decide to alter interest rates on this occasion, it did suggest that it might choose to do so in the future.

The euro was seen at $1.1109 on Friday, which represented a flat position.

However, it was near to its worst point for a week – $1.1094, on Thursday.

Central banking action is a key part of the upcoming forex agenda.

The US Federal Reserve will meet next week and will make its decision on 30th October.

It is widely expected that the Fed will cut interest rates by 25 basis points, or 0.25%, when it next meets.

According to some analysts, the markets have already priced in a cut of this magnitude.

The Bank of Japan will also meet next week.

It is unclear what decision it is going to make, and analysts are divided.

However, there appears to be a growing consensus that it will hold rates as they currently are.

In terms of other major currencies, Friday also appeared to be shaping up to be a poor day for the US dollar index.

The index, which measures the performance of the greenback against six other currencies from around the world, was seen at 97.66 at one stage.

The Swedish crown was seen trading at 10.72 in its pair against the single European currency.

This was lower than its position on Thursday, however.

On Thursday, the local central bank, the Riksbank, strongly hinted that it would move interest rates up out of their current negative territory and to 0% by December.

Restrictions on its growth today, however, may have come from the fact that the Riksbank also suggested that it was unlikely to boost rates further after December.

The British pound continued to remain unsteady after further confusion about if and how Brexit would occur.

A general election could now be on the cards for the country, although Boris Johnson has to get the support of two-thirds of the House of Commons in order to catalyse the election.

Some opposition parties are refusing to make a decision about whether to back this until the EU has confirmed the length of any extension.

The pound went down as a result of the uncertainty.

It was seen to lose a fifth of a percentage point in value in its pair against the US dollar, reaching $1.2835 at one stage.

It was also seen going down by the same proportion in its pair with the euro – which was especially significant given the wider negative performance of the euro due to the European Central Bank’s announcement.

The next step for the pound is likely to come next week.

The French government is understood to be awaiting further clarity on the likelihood of a general election before it makes a decision on whether or not to veto an extension.

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