Monday, May 12, 2014

Euro Trades Near 1 Month Low as ECB Officials Speak

The euro extended losses against the dollar into a second session on Friday, falling to a one month low at the close, one day after the European Central Bank flagged possible monetary easing as soon as next month.

The euro fell from two and a half year highs against the dollar on Thursday after ECB President Mario Draghi said the bank is “comfortable” with acting to shore up growth and stop inflation from falling too low at its next meeting in June. The comments came after the ECB left rates on hold, as expected. Draghi also said the strength of the euro was “a serious concern” and added that the bank would be closely monitoring exchange rate developments.

The single currency came under additional pressure after data on Friday showed that German exports fell 1.8% from a month earlier in March and the country posted a smaller-than-forecast trade surplus. The U.S. dollar weakened against the other major currencies earlier in the week after Federal Reserve Chair Janet Yellen struck a dovish tone on the economy during testimony to the Joint Economic Committee of Congress.

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