EURO struggles out of the gate in Asia

The euro came under pressure following comments from the head of the European Central Bank suggesting it will stick to its loose monetary policy for now, disappointing those who had hoped for some form of tightening at its June meeting.

Mario Draghi said the ECB was “firmly convinced” it must maintain its interventions in the eurozone economy to avoid undermining a gathering recovery.

The bank’s interest rates are at historic lows, while the ECB buys tens of billions of euros in bonds each month to pump cash into the financial system.

Stephen Innes, senior trader at OANDA, said: “The euro was trading a tad dark as Draghi’s latest comments suggest the EU still needs stimulus, sounding much less hawkish than the market lean.”

The pound was also struggling as Prime Minister Theresa May’s ruling Conservatives saw their opinion poll lead narrow further against the opposition Labour Party.

Sterling had soared in recent weeks on the prospect May would win a landslide in the June 8 poll, giving her a stronger hand in Brexit talks. But the currency has fallen with the government’s poll numbers on fears Britain could end up with a bad EU exit deal.

Attention will be on the release Friday of US jobs data, which will give investors a better handle on the Federal Reserve’s plans for raising interest rates, with its next policy meeting later this month.

AFP

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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