Tags: Forex, Forex Brokers
euro

The Euro surged forward on Friday while the U.S. dollar fell

The Euro continued rallying on Friday, rushing towards a seven-week high. European Central Bank President Christine Lagarde announced on Thursday that policymakers wouldn’t consider a tapering of bond purchases for the time being.

Meanwhile, the euro zone’s flash purchasing managers’ index numbers were better than expected in April, supporting the view that the region’s economic rebound is accelerating. Still, that data had little influence on the already-stronger common currency. The United States numbers are due later on Friday.

The Euro soared by 0.3% to $1.2054 on Friday. On the other hand, the dollar index tumbled down by 0.3% against a basket of currencies.

The dollar remained in a narrow trading range on Friday. It is still near multi-week lows as investors look to the next moves by major central banks, with a U.S. Federal Reserve meeting due next week.

UniCredit analysts announced that the ECB seemed more prudent than the Bank of Canada. ECB President Christine Lagarde highlighted risks that are still tilted to the downside. Uncertainty remains on the markets. They added that investors got the opportunity to take profit on the EUR-USD pair after a recent rally.

What about the Aussie and Kiwi?

The Australian and New Zealand dollars strengthened on Friday. However, traders think that risks are pointed to the downside, especially considering the recent weakening in commodity prices.

Meanwhile, the British pound also surged forward by 0.4% to $1.3890. Rising Covid-19 vaccination rates, along with an improving economic outlook, boost optimistic sentiment, but traders are scaling back expectations for a withdrawal of monetary easing. Lagarde announced that talking about phasing out emergency bond purchases was premature.

Investors expect Fed Chairman Jerome Powell to repeat Lagarde’s message next week. That would put downward pressure on Treasury yields, as well as cap the greenback’s gains against most currencies.

Masafumi Yamamoto, the chief currency strategist at Mizuho Securities, noted that Powell has to agree on the continuation of easy monetary policy as Lagarde did it on Thursday.

Sending
User Review
0 (0 votes)

RELATED POSTS

Leave a Reply

Subscribe to Our Newsletters

Have The Best Of Trade Market News Delivered Directly To Your
Mailbox. Subscribe To Receive The Latest Market News.