Major Currencies Lose Ground after Comments by ECB President
Comments made by Jean-Claude Trichet, the European Central Bank president, at the G10 meeting held on March 10, 2008 in Basel, Switzerland, caused a dip in the value of the Euro and other major currencies against the U.S. Dollar. According to Trichet, “excessive volatility and disorderly movements in the exchange rates are undesirable for economic growth.” While his remarks were similar to those he made last Thursday after the European Central Bank made the decision not to cut interest rates, this time, his commentary was considered stronger.
Shortly after Trichet made his comments, the Euro fell to 1.5313 but quickly recovered and at 10:11 am (EDT) the Euro was down only by 0.0001 to 1.5355. The Canadian Dollar fell by 0.0033 to 1.0061 against the U.S. Dollar, as did the Swiss Franc and Pound Sterling. On Friday, March 7, 2008, the Canadian dollar fell almost half a cent against the U.S. Dollar, even though the Canadian employment report showed that 43,300 new jobs were created in the month of February.
According to IFR Markets Senior Forex Analyst, Peter Wadkins, “Trichet made everyone think twice about being short the U.S. dollar.”