The EUR/USD currency pair today dropped drastically before the speech by European Central Bank president, Mario Draghi, where he outlined a hawkish outlook. The currency pair recovered briefly after Mario Draghi‘s speech, but was trading at a much lower price than its opening price for most of the day.
The currency pair lost over 35 points at the height of its decline to trade at a daily low before Draghi’s speech infused the pair with some upward momentum.
The currency pair experienced a drastic decline in the early European session as the single currency extended its losing streak from the week’s beginning. The single currency has been on a losing streak since the election of Emmanuel Macron as French president on Sunday. Mario Draghi‘s speech indicated that the ECB noted the higher inflation figures and the improved economic results within the Eurozone, but remained slightly dovish.
The currency pair’s performance was also affected by the stronger US dollar as tracked by the US Dollar Index, which rallied to a new daily high of 99.65 and has been trading above 99.50. The greenback was largely strengthened by the higher US bond yields and the expectation of a Fed rate hike in June.
The currency pair is likely to be affected by the publishing of the ECB’s economic bulletin and the release of the European Commission economic forecasts, both scheduled for tomorrow.
The EUR/USD was trading at 1.0868 as at 17:04 GMT having dropped from a daily high of 1.0898. The EUR/GBP was trading at 0.8397 having dropped from a high of 0.8416 earlier today.
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