The Euro remains on the defensive as the trading week opened in Asia after the European Central Bank once again repeated its commitment to ensuring that deflation doesn’t get a foothold by remaining ready to provide easing as and when needed. Bullish investors of the common currency are Euro, especially after last week’s rally, are extremely skittish after Mario Draghi said over the weekend that any additional strengthening of the Euro which negatively affects the Eurozone’s economy as a whole could result in easing while Christian Noyer, another ECB policy member, reinforced that assertion earlier today saying the a more accommodative stance was needed to combat the too strong Euro.
As reported at 12:30 p.m. (JST) in Tokyo, the EUR/USD traded at $1.3850, losing 0.2% after last week’s 1.3% surge, the largest single week’s gain in nearly seven months. The EUR/JPY also fell, trading at 140.62 Yen, a loss of 0.4% while the EUR/CHF remained close to a 1-month trough 1.2135 Swiss Francs.
Tension in Ukraine Keeps Euro Bulls at Bay
Also keeping the pressure on the Euro was a ultimatum in Ukraine by the current Ukraine government who told Pro-Russian separatists that they must disarm voluntarily or they run the risk of military confrontation by the Ukrainian armed forces. A currency strategist in Singapore said that between Draghi and the Ukraine geopolitical tensions, the pressure will likely continue.