Euro Declines Against US Dollar on Dovish ECB Minutes

The euro today declined against the US dollar after the release of the European Central Bank‘s minutes of their monetary policy meeting, which outlined a dovish stance. The US dollar was stronger against the euro due to the high buying interest in the greenback as tracked by the US Dollar Index, which hit new highs in today’s session.

The EUR/USD currency pair lost over 100 points at the height of its decline as investors reacted to the dovish ECB minutes.

The release of the ECB minutes triggered the massive sell-off in the euro due to the fact that the bank’s Governing Council members expressed concern over the exchange rate. The release of the Eurozone CPI data by Eurostat early in the European session did not have a major impact on the currency pair despite the CPI figures meeting expectations. The CPI was recorded at 1.3% on an annualized basis, which was in line with expectations, and so were the monthly and core CPI figures.

The US dollar as tracked by the US Dollar Index hit a new high of 94.00 early in the North American session, but had retraced some of its gains at the time of writing. The positive US initial jobless claims data released by the Department of Labor also boosted the US dollar as they were reported at 232,000 versus the expected 240,000.

The currency pair’s future performance is likely to be affected by the release of the Eurozone’s current account data, and the University of Michigan confidence index, both scheduled for tomorrow.

The EUR/USD currency pair was trading at 1.1733 as at 15:07 GMT having declined from a high of 1.1790. The EUR/JPY was trading at 129.05 having dropped from a high of 129.54 earlier today.

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