The common currency declined modestly against peers including the US Dollar and British Pound after an official source asserted that the European Central Bank will continue with its non-standard policy measures for as long as necessary.
The Euro Exchange Rate was in the region of 1.3090 against the US Dollar as of 14:15 GMT
The US Federal Reserve might be in a position to consider reigning in quantitative easing, but it seems the ECB doesn’t feel that the Eurozone is at a point which would warrant economic policy being altered.
According to ECB Executive Board Member Benoit Coeure, the ongoing recession in the Eurozone means that the central bank will have to maintain loose monetary policy for some time to come.
He was quoted as saying: ‘Economic growth is projected to remain weak this year and inflation is expected to remain clearly below 2 per cent for the Euro area as a whole. There should be no doubts that our ‘exit’ is distant and our monetary policy is and will remain accommodative.’
Coeure’s statement caused the Euro to slip to 1.3118 against the US Dollar.
The Euro fell to a low of 0.8458 against the Pound (EUR/GBP)
The other big piece of Eurozone news today was European Central Bank President Mario Draghi’s speech in Berlin.
Draghi took the opportunity to talk up the ECB’s as yet untested Outright Monetary Transactions bond buying programme – the legality of which is currently being questioned by the German constitutional court.
Draghi asserted: ‘I would say that OMT is even more essential now as we see potential changes in the monetary policy stance with associated uncertainty in other jurisdictions of the integrated global economy […] The OMT announcement has lowered risks for core countries: the risks of a Euro area break-up; the risks arising from Target balances in such a scenario; and the risks from market interest rates distorted by safe-haven flows.’
As regards the current economic situation in the Eurozone, Draghi stated: ‘Price stability is assured, and the overall economic outlook still warrants an accommodative stance. We expect that monetary stimulus and improvements in financial markets will support a recovery later in the year […] Fiscal consolidation can be made much more growth-friendly by cutting unproductive expenditures, by establishing credible and detailed medium-term fiscal plans and by lowering the tax burden where it is harming economic activity and job creation in particular.’
The central bank chief’s comments caused Spanish bonds and yields to fluctuate.
While the Euro lost ground against Sterling, it also fell below 1.31 US Dollars as US durable-goods orders for May exceeded expectations.
Additional fluctuations in the EUR/USD pairing may occur in response to US consumer confidence and new home sales figures.
Current Euro (EUR) Exchange Rates
< Lower > Higher – Little Changed
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3090 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8484 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4135 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6961 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7620 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1787 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7075 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.5918 >
(Correct as of 14:15 GMT)
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