The euro climbed today, reaching the highest rate since October 2011 against the US dollar, after the European Central Bank made no effort to add monetary stimulus during today’s policy meeting. The currency failed to keep gains after ECB President Mario Draghi voiced concern about the exchange rate and signaled about a possibility of additional stimulus in the future.
The ECB left its main interest rate at 0.25 percent today. Draghi’s introductory speech at the press-conference following the announcement did not provide new insights, but his answers to questions spoiled mood for euro bulls. Firstly, he voiced concerns about the currency’s strength. Secondly, Draghi hinted about the possibility of additional monetary accommodation in the future depending on economic data, saying:
We are comfortable with acting next time.
As for today’s data from Europe, German industrial production unexpectedly fell 0.5 percent in March from the previous month on a seasonally adjusted basis. This is a bad sign for the euro as it suggests that the central bank should take steps to bolster the economy.
EUR/USD surged from 1.3909 to 1.3993 but failed to maintain rally and retreated to 1.3887 as of 13:24 GMT today. EUR/JPY sank from 141.73 to 141.21 after rallying to 142.35. EUR/GBP went up from 0.8203 to 0.8247 before falling to 0.8190.
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