European Central Bank is Major Player for now in the Forex

European Central Bank is Major Player for now in the Forex

Let us check the situation with the European Central Bank and other news. The United States dollar rose to a one-week high against the euro. The exception is only Japanese yen.

It was last flat against the dollar. Eurozone PMIs will most probably confirm at 51.6.

Investors trimmed bets against the greenback. They sold the euro on concerns that the ECB worried about its rise. Thus, on Thursday, the United States dollar bounces extended.

The surge has lifted the greenback about 1.3%. Thus, it is above the 28-month low it hit, on Thursday, against a basket of currencies.

Few analysts forecast it to hold for too long. Nevertheless, in Asia, the United States dollar gained broadly. Thus, if sustained, it will be the first time it has climbed three sessions in a row since May.

This week earlier, the euro touched $1.20. After that, worries brewed in the market that the rise had come too strong and fast for the European Central Bank liking. After a Financial Times report confirming those concerns, fears have intensified.

European Central Bank

Policymakers of the European Central Bank reportedly warned that if the euro keeps appreciating, it will weigh on exports. Moreover, it will intensify pressure for more monetary stimulus and drag down prices.

That followed remarks on Tuesday from ECB’s chief economist Philip Lane. Thus, he said that the exchange rate matters for monetary policy.

Lee Hardman works at MUFG. He is a currency analyst there. Hardman said that overall, the comments are suggesting that an immediate policy response from the European Central Bank to help weaken the euro is unlikely. Moreover, he added that they will rely more on jawboning to dampen euro strength for now.

At 1500 GMT, there will be a speech from European Central Bank board member Isabel Schnabel. Analysts will watch her closely for a comment about the currency.

The euro was last down 0.4% at $1.1806.

That is the current news of the market.

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