Fri, January 27, 2023

The Euro and the British Pound ended in the red on Thursday

Euro and other currencies

The Euro declined by 0.1% to $1.1401 on Thursday. The ECB left monetary policy was unchanged at its last meeting. The central bank has taken unprecedented measures over the past four months to help the economy fighting pandemic effects. However, the Euro shrugged off the outcome of the last European Central Bank meeting, remaining mostly stable.

According to analysts, the EU summit may overshadow the ECB announcement. They expect European countries to vote on a 750 billion euro ($856 billion) recovery fund on the summit to revive euro area growth.

Meanwhile, the British pound lowered by 0.3% to $1.2552. On the other hand, rising U.S.-China tensions added to the U.S. dollar’s strength. On Tuesday, a White House spokesman stated that U.S. President Donald Trump has not ruled out additional sanctions on top Chinese officials.

Trump’s administration is contemplating a sweeping ban on travel to the States by Chinese Communist Party members, according to the New York Times.

On Thursday, the greenback climbed up by 0.2% to 107.10 against the safe-haven Japanese yen. Traders were focusing on poor Chinese retail sales instead of the economic growth in the past quarter, which was stronger than they expected. However, it seems that the focus is moving more to a European Union summit this weekend.

China’s 3.2% economic growth in the last quarter surpassed market expectations of 2.5%. Despite that, an unexpected drop in retail sales was unwelcome news.

After the release of certain data, the risk-sensitive Australian dollar fell below 70 cents. It lowered by 0.3% at 69.84 against the greenback by the end.

      • Interested in trading the British pound? Read WiBestBroker’s comprehensive review on FXChoice.

What about the Norwegian crown?

The Norwegian crown tumbled down by 0.4% against both the greenback and the Euro to 9.3085 and 10.62, respectively.

Rising U.S. coronavirus cases weighed on equity markets, which in turn supported the dollar, a proxy for global risk sentiment.

No one really wants to buy more equities here because they’re worried about the second wave of Covid-19 – stated Stephen Gallo, the European head of FX strategy at BMO Capital Markets.

Traders are also worrying about the pace of corporate earnings deterioration. But they don’t want to be massively short either because the central banks are still active

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