Forex – Broadly weaker euro extends losses


Broadly weaker euro at multi-month lowsBroadly weaker euro at multi-month lows – The euro was at one month lows against the dollar on Thursday and hit five month lows against the yen as the divergence on monetary policy between the European Central Bank and other central banks pressured the single currency lower.

EUR/USD was trading at 1.3525, the lowest level since June 16.

The pair was likely to find support at around the 1.3500 level and resistance at 1.3550.

The single currency remained under pressure after ECB President Mario Draghi said earlier this week that large scale asset purchases are “squarely” within its mandate.

The remarks were the latest indication that the central bank is open to further monetary easing measures to stave off the risk of deflation in the euro area.

Demand for the dollar continued to be underpinned after Federal Reserve Chair Janet Yellen said Tuesday that interest rates could rise sooner than expected if the economic recovery continued to improve.

EUR/JPY slid 0.14% to 137.31, the weakest since February 6.

Elsewhere, the dollar slipped lower against the yen, with USD/JPY easing 0.16% to 101.51, off Wednesday’s one week highs of 101.78.

Against the pound, the euro fell to the lowest level since September 2012, with EUR/GBP at 0.7892.

Data on Tuesday showing that the annual rate of inflation in the U.K. accelerated in June added to signs that the economic recovery in the U.K. is deepening, bolstering expectations that the Bank of England will raise interest rates before the end of the year.

However, a report on Wednesday showing weak wage growth in the U.K. saw investors slightly pare back these expectations.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was little changed at 80.60, not far from Wednesday’s one month highs of 80.66.

Source By Breaking News Website | BreakingNews.WS