Euro extends its losses to its lowest level in seven months after Mario Draghi's remarks

Economies.com
2016-10-21 08:35AM UTC

The euro fell during the European market on Friday against most major and minor currencies, to extend its losses for the fourth consecutive day against the US dollar, marking the lowest level in seven months, with the escalation of fears again toward deepening monetary policies between Europe and the United States differences, especially after Mario Draghi's recent remarks in which he referred to the possibility of extending the bond-buying program, "stimulating for the economy," according to developments in the economy has recovery in the euro zone, and the dollar index rose for the second day in a row to hit the highest since March last, especially after the bets for the Federal Reserve, "the US central" to raise interest rates in December, especially after William Dudley's remarks a member of the Federal Reserve comments.

 

 

The euro

 

The EUR lost yesterday 0.4 percent against the US dollar, the third daily loss in a row, after the ECB kept interest rates steady unchanged, as well as bond-buying program at the end of its regular meeting in line with most forecasts, which took control of the financial markets, but Mario Draghi's remarks Governor of the Bank came to end the controversy over the bond-buying program.

 

 

News especially from Bloomberg News that the ECB was considering ending the bond-buying program earlier in light of the recovery of the European economy, and other speculation pointed to lengthen the work program in light of the continued need for the euro zone economy to do so.

 

 

Draghi said that the ECB will extend its bond buying program in March after March 2017 according to the developments of the economic situation in Europe, he confirmed that the bank will not end the program in a surprising way, but would leave it up to the Declaration and the preface.

 

 

Draghi said that the bank members on their way to issue new projections about growth and inflation over the bank's meeting in December, in addition to the re-evaluation of easing monetary stimulus program during the same meeting.

 

 

It is worth mentioning that the bond-buying program, which is implemented by the European Central currently; has helped the economy in the euro zone so much in achieving the maximum recovery, the Bank hopes that growth and inflation reaches the targets quickly before re-evaluating the vast stimulus policies.

 

 

The euro against the US dollar by 08:10 GMT, trading at 1.0885 from an opening price of 1.0928, after recording the highest price of 1.0929 and the lowest of 1.0878, the lowest since 9 last March.

 

 

The euro continued its decline for the fourth consecutive day against the US dollar, marking the lowest level in seven months $ 1.0878, with mounting fears again about monetary policy differences between Europe and the United States, in favor of continuing the stimulus policies in the euro zone for a long time, in return for near tighten monetary policy in the United States and the high chances of increasing US interest rates in December next.

 

 

U.S. dollar

 

The dollar index ended trading yesterday up 0.4 percent in the first gain in four days especially after the wide rise of the US currency against the low-yielding currencies -the euro and the Japanese yen-, as well as William Dudley, "a member of the Federal Reserve" comments, which increased the stakes of traders to raise US interest rates in December, those bets yesterday rose to 68 percent from 63 percent.

 

 

Dudley said that the Federal Reserve is likely to raise interest rates later this year, "the December meeting" if the US economy continues on track.

 

 

By the time 08:11 GMT, the dollar index is trading around the level of 98.52 points from the opening level of 98.30 points, recording the highest level of 98.57 points, the highest since March 10, and the lowest level of 98.29 points.

 

 

The dollar index continued to rise for the second consecutive day, recording its highest level since March last 98.57 points, reflecting the continued intensive purchases for the US currency against most currencies, especially against the European single currency euro, this and today's important US economic data is absent from the arena of the markets , is expected for the US currency to continue rising amid strong expectations for the near raising interest rates.

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