Last week’s surprisingly positive US non-farm payrolls report might have boosted the US Dollar against several of its main currency rivals, but the Euro was able to continue trading higher against the ‘Greenback’.
The Euro had previously been supported against its North American counterpart by the European Central Bank’s decision to leave stimulus unaltered and positively revise growth projections for the 18-nation Eurozone.
The EUR/USD pairing achieved its highest level since 2011 in the aftermath of the ECB announcement and largely held gains over the weekend.
On Monday the news that the Sentix investor confidence measure for the Eurozone hit a 35 month high of 13.9 in March gave the Euro an extra boost, and a dearth of influential US reports kept the EUR/USD pairing trading in a narrow range.
However, comments issued by one ECB official could pull the Euro lower in the hours ahead.
Christian Noyer, a Governing Council member of the ECB, was quoted as saying that a strong Euro puts pressure on the Eurozone and unnecessarily tests the strength of the currency bloc’s tentative return to growth.
During an interview for Bloomberg Television Noyer stated; ‘It’s a very important input in the economic development and inflation development. When the Euro tends to strengthen, it creates additional downward pressure on the economy and inflation, which in both cases isn’t warranted. So we’re not happy at the moment.’
When asked about the Eurozone’s current economic performance Noyer observed; ‘We thought that the conditions were exactly as we wanted them to be. The extreme degree of accommodation [the ECB has] at the current juncture [is appropriate, but] We stand ready to act. I, personally, am very open to all kinds of tools’.
The Euro modestly declined against peers like the US Dollar after Noyer’s comments were made public.
Tomorrow Euro movement could occur in response to German trade figures and Italian growth data.
US small business optimism and wholesale inventories figures may also have an impact on the EUR/USD pairing.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.6412,