The Euro declined by 0.4%, lowering at $1.1806 on Thursday. The currency soared earlier this week, reaching $1.20. However, traders were concerned about the fast rise. They thought the Euro’s surge was too strong for the ECB’s liking. Investors’ fears have intensified after a Financial Times report confirmed those concerns.
Lee Hardman, a currency analyst at MUFG, thinks that an immediate policy response from the ECB to help weaken the Euro appears unlikely. Despite that, ECB policymakers warned that if the common currency continues rallying, it will weigh on exports and drag down prices. As a result, the pressure will intensify for more monetary stimulus.
Meanwhile, the Australian and New Zealand dollars have tumbled down slightly against the U.S. dollar on Thursday. Commodity currencies also rallied earlier in the week; however, with the U.S. dollar’s surge, they declined.
On the other hand, the Japanese yen is returning to normal levels. The Yen was volatile for a while after the news about PM Shinzo Abe stepping down hit the market. The Japanese currency stood steady at 106.19 against the greenback.
How did the U.S. dollar fare?
The U.S. currency surged forward by 0.3% at 92.96 against a basket of currencies on Thursday. Furthermore, the strengthened dollar pushed the Sterling down by 0.5% to $1.3287. Meanwhile, the Norwegian crown declined by 0.4% to 8.8750 against the greenback.
During the last fortnight, the dollar has been fighting to hold the line after collapsing by 10% from a March peak. But if it continues rallying, the currency may post its best week in four months.
Thus far, the dollar soared by about 1.3% above the 28-month low it hit against a basket of currencies on Tuesday. Furthermore, the greenback rallied in Asia. If sustained, this would be the first time it has gained three sessions in a row since May.
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