A euro ballasted by the ECB does not join the party after the stress eases in Syria
The dollar index highs caresses a month and a half.
The pound hit his best exchange rate against the single currency in nine months.
Market currencies, like bags, has been left out in the last hours for the return of risk appetite among investors, after the US president, Donald Trump, tone down the conflict Syria. The dollar and other major currencies have taken the opportunity to get carried away with shopping, but one that has been lost ‘party’. The euro, however, tries to recover after sales caused by the publication of the proceedings of the European Central Bank (ECB).
In the text of the meeting on 8 March, the central bank has “underlined some of their main concerns,” said Kathy Lien, co-founder of BK Asset Management. The minutes of the March meeting of the European Central Bank (ECB) left no room for surprise. They show that the central bank estimates that a “large degree of accommodative monetary policy” is still needed to sustain the economic expansion of the eurozone and inflation developments.
The entity also confirms the change guide the market on March 8 and has removed the reference to increase debt purchases if necessary, because of the greater confidence that prices will reach its medium-term target slightly lower 2%. “The interesting thing is that this diverges from individual comments from ECB President Mario Draghi and Ewald Nowtony ECB member, who have been more positive than negative on monetary policy,” says Lien.
“Nowotny even asked to asset purchases this year. Given that the “acts” of the ECB were meeting in early March, we are inclined to believe that the recent optimism Draghi is a better reflection of how they feel now, “said the expert. “But with consistently surprising downward data, the euro could still extend its decline towards 1.22, the lowest level of its recent range,” says Lien.
In the euro, which also seeks to restructure against the pound from its worst change in nine months at 0.8643 pounds, he will also suffer because “the minutes confirm the extreme gradualness with which the central bank faces its monetary normalization process” meanwhile said analysts at Danske Bank. “The risk also is that any step comes later than originally planned -in June- has increased,” they add.
TENSION IN SYRIA LESS
The dollar, meanwhile, led the advance on all fronts, also driven by the rise in bond yields US Treasuries. Against the yen, it has appreciated 0.5% during the morning, to 107.490 yen. In the index measuring its performance against a basket of six rival currencies, the ‘greenback’ has been driven to near the maximum of one month and a half, to 89.778 points.
Relieving tension between the US and Russia on Syria, following a new tweet posted by Donald Trump that ‘softens’ the bellicose tone of his speech on Wednesday, he has fueled the appetite for the US currency. “Markets have welcomed the message last Trump,” says Lien.
“I never said when it would take place in Syria attack could be very soon or not.” However, he also took the opportunity to ‘take heart’: “In any case, under my administration, America has done a great job ridding the region of ISIS. Where is our ‘Thank You America’? “.