April 26 Friday 11:40 GMT
The euro eased down by 50 point to 1.2995 from 1.3045 against the dollar in a relatively subdued European trading session as the Japanese Yen gained against the major currencies following the Bank of Japan monetary policy announcement. In the absence of substantial economic data in the European calendar, the euro basically followed the price action of Euro-Yen which dipped down to 128.00 today.
The German government expressed their confidence that the Constitutional Court will confirm an earlier ruling to approve the Eurozone Rescue Mechanism after a June hearing to consider the bailouts and the ECB’s action. The Bundesbank on the other hand, a stern opponent of the ECB’s plans to purchase debts, sent a 29-page report outlining the dangers of the ECB plan.
The 21-day moving average met the support line at 1.3000. The 90-day moving average eased to 1.3025 from 1.3030.
The Bank of Japan board announced that they have voted to leave their monetary policy unchanged and maintained its pledge to increase the monetary base deposits at an annual pace of 60 to 70 trillion yen. The BOJ also said they will focus their efforts to achieve its new target of boosting the annual consumer inflation rate to 2 percent from close to zero at the earliest possible time within two years.
The BOJ was widely expected to refrain from additional monetary easing measures after their announcement on April 4 to implement an unprecedented $1.4 trillion of stimulus measures to provide liquidity into the Japanese economy. This lifted the dollar-yen rate to the four year high of 99.95 on April 11.
Dollar-Yen made extended declines to test the low of 98.20 from 99.10 (-90 points) while Euro-yen fell to 127.97 from the European High of 129.20 (-123 points)