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Euro to USD Exchange Rate weakens after Draghi hints at stimulus action in June

The Euro fell from a two-and-a-half year high against the US Dollar after European Central Bank President Mario Draghi said that the Bank would be comfortable introducing monetary stimulus measures in June if inflation remains weak.

After the news broke that the ECB left interest rates unchanged at the record low-level of 0.25% the Euro climbed to its highest-level in more than two-years against the weakened US Dollar. Those gains were short-lived however.

Draghi told journalists at the monthly ECB press conference that the Central Bank would be comfortable with introducing monetary stimulus measures at next month’s policy meeting if the regions inflation rate remains weak.

“The Governing Council is comfortable with acting next time, but before we do we want to see the staff projections that will come out in early June. There wasn’t a decision today. It’s a preview of the discussion we will have next month,” said Draghi.

He added that recent weakness in the inflation rate has been a result of food and energy prices, but the strong Euro and softer domestic demand are also pushing down inflation. He also reiterated that the ECB does not have a target for the Euro exchange rate but said that the bank would closely monitor exchange rate developments.

Following his comments the single currency tumbled to a session low and weakened against all but two of its most traded peers.

The Euro to USD exchange rate is trading in the region of 1.3887

The US Dollar meanwhile found support from data which showed that number of people filing for unemployment benefits fell by 26,000 last week bringing the total of claimants to a seasonally adjusted figure of 319,000.

Economists had been forecasting a fall of 20,000.

Euro (EUR) Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3887 ,
Euro,,British Pound,0.8191 ,
Euro,,Australian Dollar,1.4795 ,
Euro,,Canadian Dollar,1.5097 ,

As of 15:05 pm GMT