Euro Higher Despite ECB

08 September 2017 5:25:11 AM

The Euro remained close to a 2 ½ year peak against the US Dollar after the European Central Bank reaffirmed its current monetary policy. As expected, interest rates will be kept at their current ultra-low; Mario Draghi, President of the ECB, also kept the door open for more Quantitative Easing, if the economic situation warranted. Draghi said that the central bank could consider easing up on the QE throttle at next month’s policy meeting, however the current weak inflation environment and lowered inflation expectations will play a factor.

As reported at 10:04 am (JST) in Tokyo, the EUR/USD was trading at $1.20, up 0.10%; the pair had earlier hit a peak of $1.20362 while the low stands at $1.20160. The EUR/GBP is also higher at 0.08% and trading at 0.9183 Pence; the pair has ranged from 0.91739 Pence to 0.91849 Pence.

Dollar Outlook Could Help Euro

Despite Draghi’s assertions, analysts are still doubtful, pointing out that the ECB statement was generally rather dovish, and that the fall in German bunds suggests that the market’s response should have been to sell the Euro. What is keeping the EUR/USD up is the underlying weakness of the greenback which is under broad pressure from geopolitical concerns, President Trump’s failure to push through promised legislation and tepid inflation.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.

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