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

 

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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and 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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