Euro Falls as ECB President Fails to Improve Economic Confidence
The euro fell this Friday against major currencies and hit a one-month low against the dollar after ECB President Jean Paul Trichet failed attempt to unite the bank’s policy makers towards a common direction.
On the speculation that a report may show an increased consumer confidence for the second month in the United States, the dollar rose against the euro to a one-week high level, backed by the optimism that the North American economy would be recovering. Propelled by a report showing that the industrial output is plummeting in Europe, which would be an evidence of a deepening recession, 9 out of 10 major currencies gained value against the euro.
The uncertainty regarding the ECB’s future policies is not favoring the major European currency, making it to be presently unpopular among traders and investors. According to the analysts, the ECB would probably fund the economy through quantitative easing, yet, it is unclear how this process would be made, making the market to adopt cautious positions regarding the euro.
The EUR/USD fell to a one-week low level to 1.3078, from 1.3165. This trend was also confirmed in Europe and Asia, with the EUR/GBP traded at 0.8805 from 0.8835 and the EUR/JPY fell from 130.45 to 129.87.
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