The euro rallied versus safe currencies, like the Japanese yen and the Swiss franc, but fell against other most-traded currencies today amid the positive market sentiment.
The rally of European and other global stocks improved the traders’ mood, which has been rather poor at the start of this year. The big gain of the yuan eased concerns that China would devalue its currency, adding to deflation that threaten developed economies.
Yet the positive factors for the euro were balanced by prospects for monetary easing from the European Central Bank. ECB President Mario Draghi reiterated in his speech today that the central bank may act in March, adding stimulus:
As we announced at the end of our last monetary policy meeting in January, the Governing Council will review and possibly reconsider the monetary policy stance in early March.
As a result of the conflicting fundamentals, the euro demonstrated mixed performance.
EUR/USD dropped 1 percent from 1.1236 to 1.1142 as of 17:36 GMT today. EUR/AUD dived 1.6 percent from 1.5813 to 1.5590. EUR/JPY edged up from 127.35 to 127.76. EUR/CHF rose from 1.0978 to 1.1012.
If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.