Euro Dips on ECB’s Concerns

One day after the European Central Bank expressed its concerns with the recent rise of the Euro, the common currency held steady close to a 2-week trough against its main rival, the U.S. Dollar. Yesterday, Mario Draghi, the head of the ECB, said that the central bank is while the exchange rate is critical for economic growth policy makers there will be monitoring the recent appreciation of the Euro very closely with a view to judging its impact and potential risk on price stability.

As reported at 1:08 p.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.3405 after falling some 0.9% yesterday to a low of $1.33705; currently the pair is holding steady at $1.3407 very close to late New York trading. The Euro also edged lower against the British Pound, with the EUR/GBP trading at 0.8522, down from a session high of 0.8534; this follows the Pound’s appreciation following testimony yesterday by Mark Carney, the incoming governor of the Bank of England, which suggested he might not be quite as dovish as the current governor.

Draghi reaffirmed the bank’s assertion that the Eurozone’s economy should continue to gradually recover this year, but dampened investors’ enthusiasm to some extent my acknowledging that there are a great deal more negative risks ahead. Analysts point out that Draghi’s prepared statement was considerably more in depth than previous ones, suggesting the potential seriousness of the issue.