Overnight the currency market experienced extensive volatility as investors reacted to the Federal Open Market Committee’s surprising decision to taper stimulus by 10 billion US Dollar.
The Euro is currently trading against the US Dollar in the region of 1.3674
The majority of economists believed that the Fed would refrain from trimming easing until the US economic recovery was more assured, but the recent positive employment data seemed to give the central bank the boost it needed to take this highly influential step.
During the policy announcement the Federal Reserve also stressed its commitment to keeping borrowing costs lower for longer.
Currency strategist Sean Callow said this of the decision; ‘The overall feeling is that the Fed is probably optimistic enough that they’ll probably continue the tapering in coming months.’
The EUR/USD pairing also slipped as the Euro came under pressure as a result of European Finance Ministers discussing the planned banking union in Brussels.
As another industry expert observed; ‘We’ve got a little bit of event risk tonight in the sense there’s a European leaders summit where they’re supposed to come up with proposals for a banking union. The risk to me is downside in Euro for the next 24 hours.’
However, Euro losses were slightly limited by the news that the Eurozone’s current account surplus widened in October.
The region’s surplus expanded from a revised 14.9 billion Euros to 21.8 billion Euros, a six month high.
Today’s US initial jobless claims figures and existing home sales report could be responsible for further EUR/USD movement.
Before the weekend investors will be focusing on German/Eurozone consumer confidence data.
Euro (EUR) Exchange Rates
As of 11:15 GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3674 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8356 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5429 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6695 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4653 >