Monetary Tightening Could Support Euro Further
By Daisy Joseph
Euro jumped higher reaching its highest value in weeks against the dollar.
Euro was one of the currencies to be affected by the geopolitical conditions. After the tension surrounding the French Presidential election Euro tumbled in the forex market. However, the results of first round of French election has brought hopes to the market as Macron is favored over Le Pen in the first round. Euro jumped higher reaching its highest value in weeks against the dollar.
However, the start of the day hasn’t provided a big change for the Euro. On Tuesday, the European Central Bank announced that it is inching towards a tighter monetary policy. While this is most welcomed, many experts are worried that ECB is moving slower than necessary.
The monetary tightening policy should support Euro because this policy will taper the stimulus program of the ECB. Mario Draghi president of the ECB is meeting with the ECB Governing Council on Thursday. The press conference after this meeting is significant as Draghi could give hints on how the monetary policy will be changed.
The actual policy changes may be implemented only in 2018, but it would support Euro further in the market. Euro shows changes in its value even with tiny changes in the geopolitical and economical situations. When ECB shows interest in making policy changes Euro would change remarkably.
Euro remained stable against the British Pound as well, but it climbed against the Yen. The market’s interest in the haven currency Yen has reduced mainly because dollar and Euro have started to climb.
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