USD Rises on Dovish ECB

The U.S. dollar rose on Monday, trending higher throughout the session as investors bet that Europe could see continued dovish monetary policy going forward, although geopolitical uncertainty remained elevated and could keep a cap on the buck’s advance.



In comments delivered on Monday, European Central Bank President Mario Draghi said that despite signs of improving economic conditions, the region’s economy was not yet strong enough to withdraw stimulus. He added that recent pick ups in inflation were driven by energy prices, which can be volatile, rather than driven by economic improvement, as would be the case for core inflation.

“We were waiting to see if he would say anything more hawkish than we’ve been getting, but his argument seems to be that we’re just seeing headline inflation, not core inflation for the moment,” said Jane Foley, senior currency strategist at Rabobank.

via MarketWatch

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza