Euro is lower today, and Mario Draghi’s comments aren’t helping. A combination of concern about the eurozone and general risk aversion is leading to losses for the 17-nation currency.
Today, the ECB Governing Council announced that it would keep the eurozone’s benchmark rate at 0.75 per cent. This news was largely expected, and many were more interested in ECB President Mario Draghi‘s assessment of the economic situation. Draghi pointed out that confidence is returning to the 17-nation currency region, but he also warned that economic growth would be week during the early part of this year.
The news that economic growth for the eurozone is expected to be weak for now, coupled with the fact that the euro has seen such huge growth recently, has led to a drop for the 17-nation currency. It’s also not helping that risk aversion has appeared. Thanks to concerns about the US economic recovery, risk assets are dropping, and that includes high beta currencies like the euro.
For now, with weak growth expected until the second part of the year, and with Draghi insisting that the ECB will keep an eye on whether or not euro appreciation is hurting the recovery, euro should continue to struggle.
At 15:57 GMT EUR/USD is down to 1.3356 from the open at 1.3522. EUR/GBP is down to 0.8524 from the open at 0.8634. EUR/JPY is down to 124.7480 from the open at 126.6100.
If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.
