EUR/USD crawling back following Trump comments
- Euro trading up through Asia after Trump-fueled Dollar spike
- US GDP numbers to release this afternoon
EUR/USD trades up 0.5% at around $1.2470 paring back some of the losses following Trump’s pro-Dollar comments that sank currencies during the New York market session. The US GDP for the fourth quarter is due later in the session with 3.0% increase expected by the market.
The ECB Governing Council member Villeroy said the ECB is monitoring effects of FX shifts on inflation while keeping confident and patient stance.
The Euro has been claiming back territory it lost to the US Dollar yesterday following Dollar-boosting remarks from US President Donald Trump. EUR/USD has made good progress recently, bolstered by comments at the World Economic Forum in Davos made by US Secretary of the Treasury Steven Mnuchin that celebrated the trade benefits of a weaker Dollar.
During the European Central Bank (ECB) press conference on Thursday, President Draghi took the opportunity to address markets indirectly lambasting Secretary Mnuchin’s statements, claiming they flew in the face of applied convention and breaches a pledge made by IMF to members to “refrain from competitive devaluations” to avoid outright currency wars.
Draghi’s words did little to cool down the Euro currency, sending the EUR/USD over the $1.2500 handle until Donald Trump walked back Mnuchin’s comments by stating that he “ultimately” wants a strong Dollar and that Mnuchin’s remarks were misinterpreted by markets.
Trump’s words did what Draghi’s could not, sending EUR/USD back down from 2014 highs.