The euro today crashed to almost 2-year lows following dovish comments by the European Central Bank Governor after the bank’s interest rate decision earlier today. The EUR/USD currency pair today fell to lows last witnessed in June 2017 after the ECB slashed the eurozone’s economic growth forecasts and announced new easing measures.
The EUR/USD currency pair today fell from a high of 1.1320 to a low of 1.1205 following the dovish actions by the bank and its Governor’s comments.
The currency pair had traded in a 20-pip range up to the early European session despite other European macro releases such as the mixed final eurozone Q4 GDP data released by Eurostat whose annualized print missed expectations. The release of the final Q4 eurozone employment change data also had a muted impact on the pair. The pair headed lower after the ECB released its dovish monetary policy decisions, which were followed by Mario Draghi‘s dovish speech. The selling pressure rose as the ECB Governing Council revised its forward guidance and announced that it would begin a new round of 2-year TLTROs in September this year.
Investors expected the ECB to maintain its current rates, which it did, but were shocked by the further measures. The upbeat US initial jobless claims data released by the Department of Labor added to the pair’s woes.
The pair’s future performance is likely to be affected by investor sentiment and tomorrow’s US non-farm payrolls report.
The EUR/USD currency pair was trading at 1.1211 as at 19:11 GMT having fallen from a high of 1.1320. The EUR/JPY currency pair was trading at 125.08 having dropped from a high of 126.42.
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