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Stimulus Talks Continue to Hurt Euro

May 28, 2014 at 0:54 by Vladimir Vyun

A fan of 500-euro billsThe euro fell against the US dollar yesterday and continued to drop today as speculations about a probable additional monetary loosening in June make the currency less appealing to Forex traders.

European Central Bank President Mario Draghi spoke on Monday, signaling that the central bank is very likely to act in June to bolster the struggling economy of the eurozone. The speech did not have an adverse effect on the euro initially, but the currency started to fall on the next day and continues to fall now. The ECB will hold a meeting on June 5 to make a decision about monetary policy.

The euro was not as vulnerable as one might expect, holding ground versus the yen and actually gaining on the sterling. The probable reason for this was the calming of tensions around Ukraine, and it means that Europe will not be required to impose additional sanctions on Russia, which might hurt Europe’s economy as well.

EUR/USD fell from 1.3634 to 1.3630 as of 00:52 GMT today after dropping from 1.3644 to 1.3633 yesterday. EUR/JPY was at 138.95, near the opening level of 139.02. EUR/GBP traded at about 0.8106 today after rising from 0.8098 to 0.8109.

If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.

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