Euro Falls on ECB Rate Decision and Dovish ECB Strategic Review

The euro today crashed to new monthly lows against the US dollar after the European Central Bank announced its rate decision and strategic review. The EUR/USD currency pair today fell to lows last seen on 2nd December 2019 amid a risk-averse market environment that saw most European equity indices close the day lower.
The EUR/USD currency pair today spiked to a daily high of 1.1109 in the European session before falling to an 8-week low of 1.1036 in the American session and was near these lows at the time of writing.
The currency pair opened today’s session trading sideways during the Asian session with a slightly bearish angle. The pair fell somewhat after the ECB Governing Council announced its interest rate decision where it left the key lending rate stable at 0% and the deposit rate at -0.5% as expected. The dovish speech by ECB President Christine Lagarde at the press conference that followed also did not undo the pair. The dovish ECB monetary policy statement also did not trigger the pair’s massive drop. The single currency crashed after the ECB officially launched the strategic review of its monetary policy strategies.
The pair had a muted reaction to the release of the upbeat US jobless claims report by the Department of Labor. The pair kept falling after the release of the disappointing preliminary eurozone consumer confidence index for January by the European Commission.
The pair’s future performance is likely to be affected by tomorrow’s multiple eurozone and US Markit PMI releases.
The EUR/USD currency pair was trading at 1.1049 as at 18:03 GMT having fallen from a high of 1.1109. The EUR/JPY currency pair was trading at 120.86 having dropped from a high of 121.79.

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