By: Barbara Zigah
The Euro came off a 2-month low versus the U.S. Dollar in Asian trading on Friday, though the risk of any break below the July low is believed to be on the rise following yesterday’s ECB policy setting announcement. Jean-Claude Trichet, the outgoing head of the ECB, took a more dovish tone than previous meetings. A slowing economy and a worsening debt crisis in the Eurozone took center stage, while the threat of rising inflationary pressures appears to have eased off the ECB’s radar somewhat.
On the other side of the Atlantic, a relatively muted response was seen to President Obama’s jobs proposal package, which still must be pushed through the U.S. Congress where it faces tough resistance from Republican politicians.
As reported at 3:10 p.m. (JST) in Tokyo, the Euro was trading against the greenback at $1.3890, after falling to $1.3873 yesterday, the lowest price for the EUR/USD pair in two months. Currency analysts say that a close below the $1.3900 mark, which is a retracement of the January to May rally, could signal further weakness. One trader in Australia believes that the Euro trend is unequivocally bearish, and the currency is likely to spiral downward.