The euro demonstrated the second consecutive weekly losses as surprises from the European Central Bank and US non-farm payrolls pounded the currency into the ground.
Last week the euro was soft mostly because of dollar’s strength, but this week the shared 17-nation currency has its own reason to drop: the unexpected interest rate cut from the European Central Bank. Strictly speaking, the cut itself was anticipated, it is the timing that surprised market participants. Most analysts have believed that the ECB would delay its policy change to assess the economic conditions in the eurozone.
Now all attention turned to the Federal Reserve. Previously, it was hard to believe that the US central bank will be able to reduce its monetary stimulus soon. But surprisingly good non-farm payrolls make quantitative easing tampering much more likely and such prospects made the dollar stronger and the euro even weaker.
EUR/USD dropped from 1.3484 to 1.3385 this week. EUR/JPY declined from 133.23 to 132.45, reaching the weekly low of 131.21. EUR/GBP sank from 0.8464 to 0.8341.
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