Currency News: Euro gains 1.8% on U.S. Dollar

European Central Bank president Mario Draghi has come under fire of late for his inability to weaken the Euro. While Draghi hasn’t explicitly stated that he is aiming to lower the price of the Euro, he has said that he was hoping to expand the region’s money supply, which would in turn lower the price of the Euro. While many traders were hoping to see the Euro go down, many are frustrated to see that the Ruo has gone up 1.8% against the dollar, in the past six months where it now stands at $1.13.

currency news

During Q2 of 2014 Draghi had started a $1.2 trillion bond-buying program. At first the program seemed very successful as the euro’s value quickly began to tumble. In just the span of 10 months the euro’s value dropped from $1.40 to $1.05. However, over the last six months the euro has bounced between $1.05 and $1.15.

Part of the reason why for the euro’s original fall was because of the quantitative easing Draghi had done, which ended around the time euro stopped falling. Many strategists believe Draghi should start QE again, but also expect the euro will only drop a few cents and finish the year at around $1.10. With China’s economic crisis at hand it will be difficult for the Euro to drop more, as other currencies, such as the US dollar and the Australian dollar rely on Chinese imports far more.



Comments are closed.