Euro Slide Continues on ECB Commentary

The European Central Bank yesterday made its policy announcement and though the outcome had been expected as indicated by a recently conducted poll of analysts and experts, it was Mario Draghi’s cautious commentary afterwards which sent the Euro lower amid investors’ fears. According to the ECB president, the geopolitical tensions in the Russia and the Ukraine, and the imposition of sanctions on Russia by the E.U. were a point of concern which threatened the Eurozone’s economy. Russia is a key trading partner with the Eurozone, and sanctions imposed not just by the E.U., but by the U.S. and other allies could affect the Eurozone’s future growth. Draghi also cited the ongoing tensions in the Middle East as another area which posed a threat.

As a result, the Euro came under heavy sell pressure and the EUR/USD is now poised to close out the week with a 0.5% loss; the pair was trading at 1:01 p.m. (JST) at $1.3360. The Japanese Yen was the beneficiary of the Draghi-stoked fears, with the USD/JPY easing back to 102.05 Yen while the EUR/JPY was trading lower at 135.8345 Yen. The Bank of Japan is also about to make its policy announcement; analysts expect the BOJ to maintain its existing bias but said that if the BOJ’s outlook appears weaker that could prompt further expectations of additional easing.

Aussie Dollar Could Recover on Trade Data

The Australian Dollar fell after recently released labor data showed an unexpected rise in the country’s unemployment rate, however analysts point out that trade data from China might provide some support if the expected rise in exports is realized. The AUD/USD was trading at $0.9267, recovering from Thursday’s hard slide of nearly 0.9%.

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.