The European Central Bank (ECB) released their latest interest rate decision today and as expected rates were kept on hold at 0%.
It was the subsequent press conference that held most weight with investors, with ECB president Mario Draghi talking up the positive effect the current monetary policy programme was having and mentioned that could look to tie this up by the end of this year.
Despite this the EUR found life tough against the USD today, losing almost a cent and a half from the high.
EUR/USD rates crashed, as reports surfaced that President Donald Trump was going to impose heavy tariffs on imported steel & aluminium. The goal behind this is to internalise production and keep out “foreign” products. This in turn would boost US Manufacturing jobs and in turn the US economy.
However, this could put huge pressure on the global economy and as such it is causing investors to move their funds away from the Euro and back into the safer haven USD.
Whilst the EUR has had a difficult day against the greenback, it continues to be well supported against the majority of major currencies. GBP/EUR rates are floating around 1.12, with Sterling still struggling to make any significant impact against the single currency. Poor UK Services data earlier this week curbed any further losses for the EUR, which has found plenty of support around the current levels.
With so much emphasis on Brexit negotiations at present, it was always likely that this rather than individual economic data releases are going to continue to drive market sentiment and ultimately investor confidence over the coming months.
The media seems to be cementing this negative perception, with any positive report followed by two or three negative ones and this is one of the main reasons the Pound is struggling to make any sustainable gains against the Euro.
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