The euro continues to show strength in currency trading on the FX market, even though stimulus is in effect, and there could be more stimulus on the way for the eurozone. Signs that stimulus efforts are having an impact are providing support for the 19-nation currency, as is the fact that the Federal Reserve has yet to truly commit to policy divergence and raise rates again.
Last month, the ECB cut interest rates and expanded the asset purchase program in an effort to stimulate the economy and keep money moving. The result has been a modest growth in lending. While the pace may not be quite as fast as some would like, there has been an increase.
Some have been baffled by the continued strength of the euro against its counterparts. Many had expected the 19-nation currency to have fallen by now. However, the euro remains relatively strong, particularly against the US dollar and the UK pound.
Many analysts have expected the ECB to show concern at the continued strength of the euro, but policymakers don’t seem to be worried about the situation.
At 13:38 GMT EUR/USD is up to 1.1314 from the open at 1.1297. EUR/GBP is up to 0.7766 from the open at 0.7749. EUR/JPY is up to 125.7760 from the open at 125.8020.
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