Euro Rates Today: EUR powers ahead vs the USD and GBP

The euro dollar exchange rate has advanced by 0.1 pct to reach 1.3509 at mid-morning on Monday. The euro to pound exchange rate is meanwhile 0.1 pct lower at 0.8382.

The euro Aussie is 0.35 pct lower at 14357 and the euro kiwi is 0.6 pct lower at 1.6109.

PS: All quotations are taken from the wholesale inter-bank market. Your bank will affix a spread at their discretion when delivering you FX. However, an independent provider will seek to undercut your bank's offer, thus delivering up to 5% more currency. Please learn more here.

The EUR/USD has recovered the majority of its losses witnessed since the ECB refi rate cut earlier this month. EUR/USD is now broadly in line with 2y forward points.

The final CPI print of 0.7% y/y justifies the banks decision to cut the refi rate, and underlines the banks exceptionally loose monetary policy stance.

"There remains risks the ECB could announce further measures, with another LTRO still quite possible. The 1.3500/10 area will likely provide good initial resistance on the topside for EUR/USD. We favour EUR to the downside; we think it remains difficult to see much EUR gains from here with the ECB maintaining a dovish stance," says a note on the euro dollar exchange rate from Lloyds Bank Research.

Ahead, November flash PMI will be the main focus this week, a marginal improvement is expected after sentiment fell slightly in October.

From a technical perspective we hear from RoboForex who warn of the potential for further losses in the Euro rate today:

"The euro continues forming the third ascending wave. We think, today price may reach the local predicted target at 1.3570 and then fall down towards 1.3440. Later, in our opinion, pair may start another ascending structure to reach main target of this ascending wave at 1.3590."

Sentiment turns bearish on the euro

Fresh data from the CFTC has confirmed that the outlook for the euro will remain challenging as traders cut back their long exposure to the currency.

Weekly data from the CFTC show that the EUR net long was cut in half again this week and now stands
at just $2.8bn.

"In a disinflationary environment, a surprise ECB interest rate cut and disappointing growth, sentiment is building rapidly against the currency. However, there was a hesitancy from traders to short EUR—potentially small suffering from repeated failed attempts to bring EUR lower in 2013. We expect bearish
sentiment to continue to build against EUR," says a note on the matter from Scotiabank.