This Week Across The Forex Markets
Europe’s single currency looks set to end the week with falls of more than 2% against the U.S. Dollar and the Japanese Yen. Around noon on Friday, the Euro was at 0.09% to 1.2380 dollar.
The trend is little more pronounced against the Yen and neutral against the Swiss Franc, the Euro declined further against the Pound (- 0.7967 to 0.20%).
On the week, the Euro has lost about 2.2% against the Dollar and Yen and 1.2% against the Pound.
Central banks were in the spotlight yesterday and the overall picture was considered generally negative. Thus, the Bank of England kept its key rate to 0.50%, which it has for the third time in less than a year increased the amount it devotes to its quantitative easing plan (+ 50 billion sterling 375 billion).
‘Today’s decision is not really a surprise. The pressure on the leaders of the BoE had increased since the beginning of May when the situation in the eurozone worsened and the British economy plunged back into recession, it has shown few signs of improvement ‘, comments this morning from Economist.
The European Central Bank (ECB) has reduced its key rate from 1 to 0.75%, a new historical low. It also lowered the rate on the deposit banks within it from 0.25 to 0%, to encourage banks not to “park” their cash at home.
On this decision, Desjardins expressed his ‘relief’, but adds, “the ECB justified its decision to cut rates by the occurrence of certain downside risks to inflation in the short term. The Euroland economy also remains in bad shape ‘.
A North European Forex trader echoed the president’s speech by the Governing Council of the ECB, which accompanied this decision: ‘Mario Draghi has insisted that inflationary pressures had weakened, that growth was still punishment, and that the uncertainty in financial markets had a direct impact on confidence, consumption and investment ‘.