Euro Extends Decline for Another Session

The euro extended its decline for the second day during the Friday’s trading session following Thursday’s policy meeting of the European Central Bank. The currency still managed to beat the very soft Japanese yen but fell against other most-traded rivals.

Yesterday, the ECB announced that it reduces the size of asset purchases but postpones the planned end of the asset-purchase program from March 2017 to December 2017. Markets considered the net result to be negative for the euro, and that led to a massive sell-off. Adding to the woes of the currency, ECB President Mario Draghi sounded rather dovish in his comments after the meeting, and on top of that, the central bank’s inflation projections were subdued.

Now, traders focus on the next week’s Federal Reserve meeting. Markets count on an interest rate hike, resulting in a risk-off sentiment for many traders. While it failed to attract investors to the safety of the yen, risk aversion are likely to drive speculators away from many of the dollar’s rivals.

EUR/USD dropped from 1.0613 to 1.0555 as of 20:44 GMT today. EUR/GBP declined from 0.8432 to 0.8392. At the same time, EUR/JPY advanced from 121.03 to 121.64.

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