Markets did not expect anything particularly important from this week’s European Central Bank meeting, but it turned out to be perhaps the most important event during the week, making the euro the strongest major currency. Meanwhile, the highly anticipated US nonfarm payrolls turned out to be almost non-event, having negligible impact on markets.
ECB President Mario Draghi was surprisingly hawkish at the press-conference that followed the central bank’s policy meeting, providing a boost to the euro. Perhaps even more important to the currency were the rumors emerged on Friday about possibility of an interest rate hike from the European Central Bank before the quantitative easing program runs its course. Additionally, markets turned their attention away from the upcoming elections in Europe, easing pressure on the currency of the eurozone.
Meanwhile, markets barely noticed the release of nonfarm payrolls, which gave mixed signals due to solid employment growth being countered by slower-than-expected wage growth. Nevertheless, analysts think that the positive employment figure solidified chances for March interest rate hike from the Federal Reserve.
EUR/USD was down from 1.0607 to 1.0524 during the week before rebounding to close at 1.0671. EUR/GBP rallied from 0.8630 to 0.8766. EUR/JPY gained from 120.81 to 122.42.
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