The euro climbed against its major rivals in European trading on Tuesday, on the back of a weaker dollar, and as the European Central Bank Executive Board member Benoit Coeure said that the central bank is unlikely to cut the deposit rate into "absurdly low levels." The policymaker said that thus far negative rates have not had a major impact on market makers themselves. On the other hand, banks' profitability has improved due to a mix of lower funding costs, increased lending volumes and lower loan-loss provisions, Coeure said."To be sure, this would not necessarily remain true if the deposit facility rate were to be set at significantly lower levels." "But this is why I have said elsewhere that we would not take it to absurdly low levels," he added.
There will be no data releases from Eurozone tomorrow. In the US session, ADP job figures and Non-Manufacturing PMI data will be published. Analysts are forecasting increase by 205,000 in private sector employment, while Non-Manufacturing PMI should rise to 54.9.
Figures to watch:
ADP Non-Farm Employment Change (Wednesday 14:15)
ISM Non-Manufacturing PMI (Wednesday 16:00)
