Since last week, when the head of the European Central Bank offered his strongest hint yet that the monetary policy committee was ready to imminently intervene in the too strong Euro, the common currency which had been under constant pressure has finally stabilized however because FX traders are very wary, potential gains appear limited says currency strategists. Since last Thursday, after Mario Draghi’s comments were made, the common currency has lost about 1.7% of its value against the greenback, falling from a 2½ year peak and retreating near to its 100-day average.
As reported at 11:50 a.m. (JST) in Tokyo, the EUR/USD was trading at $1.3754, moving away from Friday’s 1-month low at $1.3745 but is well off the $1.3995 high which the pair was trading at prior to the monetary policy announcement. The EUR/JPY edged slightly higher to 140.24 Yen, a gain of 0.1% but within striking distance of Friday’s low of 139.88 Yen.
Analysts Debate Outlook
Analysts have failed to reach consensus about the Euro’s future, with some anticipating a corrective movement and others believing it to be a solid downtrend, however most agree that they would wait for additional ECB direction. The situation in Ukraine is also weighing on the common currency, with investors worrying that a civil war could brea out.