On Thursday, the European Central Bank President Lagarde had hinted further policy easing as early as by December this year, while the bloc’s common currency euro slid to a nearly four-week low against its American counterpart after Lagarde’s remarks which followed a meet with the ECB policymakers.
On top of that, while euro has been plunged to a nearly one-month-low against the American currency over possibilities of further policy easing in a short-term outlook, the US Dollar Index (DXY) measured against a basket of six major currencies on an average spiked 0.4 per cent to a one-month trough.
Euro falls to one-month low as dovish ECB drags, pandemic lockdowns weigh
In point of fact, although the American currency’s recovery had been partly due to a record surge in GDP (Gross Domestic Product) growth over the third quarter of the year alongside an improvement in jobless claims data, though markets had been mostly focused on ECB meet as Europe had been vying to vent out a way to cushion up pandemic’s fiscal blows at a time while two of the bloc’s major economies such as Germany and France had re-imposed partial national lockdowns.
Amid such chaotic fundamentals for the bloc’s common currency, the European Central Bank had kept its benchmark lending rate steady on Thursday, though added that it could ease monetary policy further during its December meet.
Meanwhile, referring to a much-required reform in ECB policy in order to grapple with the pandemic’s fiscal consequences, ECB President Lagarde said in a news conference, “We agreed, all of us, that it was necessary to take action and therefore to recalibrate our instruments at our next Governing Council meeting,” while analysts across the globe had contemplated the eurozone currency’s fall as a reflection of further policy easing from the ECB.
Citing statistics, followed by the remarks of ECB President Lagarde, euro jolted as much as 0.6 per cent to $1.1681 in the morning trading against its American peer, however, had wrapped up the day 0.62 per cent lower to $1.6733, its lowest level in more than a month.
Apart from that, the bloc’s common currency fell 0.4 per cent against the safe-haven Japanese Yen to 122.03, while the greenback rose to a four-week high of 93.81. Besides, euro fell 0.17 per cent against the British currency to £0.9030 and around 0.45 per cent against the Australian Dollar to A$1.6596.