The Euro was steady during the Asian trading session today, recovering from lows inspired by dovish commentary made by some officials of the European Central Bank. On Tuesday, one member of the governing council had referred to the possibility that the ECB might employ negative interest rates or additional quantitative easing in order to mitigate the current deflationary trend; those comments sent the Euro into a tailspin and resulted in it striking a 3-wee trough against its main rival, the U.S. Dollar.
The common currency recovered shortly thereafter when the same ECB official backtracked and said that current monetary policy is likely to be unchanged given that the existing rates are acceptable. The ECB head Mario Draghi had pointed out last week that deflation does not yet appear to be a concern for the ECB. As reported at 10:47 a.m. (JST) in Tokyo, the EUR/USD was trading at $1.3818, edging off the 3-week low of $1.3749 that had been struck on Tuesday.
Despite Data Dollar Gains Limited
Market watchers had been hoping that newly released economic data would help provide the U.S. Dollar with a lift and some clarity, but despite consume confidence levels rising in March to a 6-year peak, the greenback’s gains were limited. Though the U.S. Dollar Index had edged 0.1% higher to trade at 79.979 .DXY, the FX markets’ measure of the greenback failed to breach last week’s peak of 80.35 .DXY which occurred when the new Federal Reserve chief mentioned the possibility of an interest rate hike early in 2015.