The euro rallied today as speculators continued to anticipate quantitative easing tapering from the European Central Bank. While the shared 19-nation currency was unable to beat the very strong Great Britain pound, it gained on other most-traded peers, especially safe haven currencies.
ECB President Mario Draghi attempted to talk down the euro at last week’s press conference, which followed the decision to keep monetary policy unchanged. Yet market participants were unconvinced by his complains about excessive strength of the currency, especially as he hinted that policy makers will discuss adjustments to monetary policy at October’s meeting. Furthermore, yesterday several ECB officials suggested that the current economic conditions may warrant tighter monetary policy in the near future.
The outlook for less accommodative policy helped the euro to gain on its rivals, even on the US dollar, which was supported by positive employment data. The improving market sentiment was also helping the common European currency. Yet it was unable to outperform the sterling, which got support from surprisingly good inflation data.
EUR/USD ticked up from 1.1951 to 1.1962 as of 19:44 GMT today. EUR/JPY gained from 130.73 to 131.82. EUR/GBP dropped from 0.9078 to 0.9002.
If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.
