The EUR/USD currency pair today rallied briefly after a speech by the European Central Bank President Mario Draghi following the bank’s interest rate decision. The currency pair’s decline was triggered by the resurgence of the US dollar following reports that top US government officials were heading to China for talks on the ongoing US-China trade war.
The currency pair initially rallied to 1.2209 after Draghi’s hawkish speech before it dropped massively losing over 110 points to hit a low of 1.2097 at the time of writing.
The currency pair’s initial rally was triggered by the upbeat tone of Mario Draghi’s speech, which boosted the euro. In the speech, Mario Draghi downplayed the risks facing the Eurozone following some dismal economic indicators in the recent past. The euro reacted poorly when the ECB maintained the status quo of its monetary policy decisions. The bank left its main interest rate at 0.00%, while the interest rate on the marginal lending facility was maintained at 0.25%, and the deposit facility was kept at -0.4%.
The pair’s decline was triggered by news that President Donald Trump‘s chief economic advisor Larry Kudlow, and the US Secretary of the Treasury Steven Mnuchin were traveling to China. The duo are expected to meet with top Chinese trade officials, which investors interpreted as sign of a positive outcome for the US-China trade war.
The currency pair’s future performance is likely to be affected by tomorrow’s French GDP data, German unemployment data, and the US Q1 GDP data.
The EUR/USD currency pair was trading at 1.2102 as at 19:46 GMT having declined from a session high of 1.2209. The EUR/JPY currency pair was trading at 132.36 having dropped from a high of 133.25.
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