In five weeks now, the euro is in massive pressure as it slides down in the market. With this, the European Central Bank (ECB) is trying to be careful about changing their dovish implication. The United Kingdom was also in the process of departing from the European Union.
The ECB is becoming more cautious about making any change of its monetary-policy before the month of June. It was noted that the Euro Index went down to approximately 0.5 percent – which is the biggest drop recorded since February 21 of this year. The euro has been under strain. It is a hot topic of current trade talks, which sends concerns on the European security in the foreign exchange market.
The European currency extended its defeat against the dollar. EUR/USD dashed to 1.0721, the lowest since March 21. Low interpretations of the German inflation hurled the euro lows against the dollar. As the euro fell from a four-and-a-half month high of $1.0906, it helped the dollar index move up positively by 0.1 percent at 100.15.
The dollar is getting back on track after a series of collapses as U.S. President Trump assumed office. Two Federal Reserve policy makers even signaled the potential need to have a faster pace of interest-rate increases than the regular and current rate. Eric Rosengren, President of the Federal Reserve Bank of Boston, recommended that at least four hikes this year must be done to guard the economy from overheating.
Elsewhere, Sterling got also knocked by as the dollar recovered. It was mainly due to Prime Minister Theresa May’s commencement ofArticle 50, a prerequisite of Britain’s official exit fromthe European Union. Sterling went down 0.1 percent at $1.2414. Josh O’Byrne, currencies strategist of Citi G10 stated that the conclusion has affected the market sentiment on euro somehow, whereas the mood around the dollar has tempered very much.
GBP/USD sank to 1.2437, placing it into negative territory, whereas the EUR/USD dropped to 0.17% to 1.0747.
The weakness lies on several uncertainties and questions the market has about current matters concerning U.K. Softer inflation data in Spain and Germany is weakening the euro as well as clamors regarding Brexit negotiations.
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