Euro Exchange Rate vs Dollar

On Friday, Euro Exchange Rate went up to a new height against the US dollar and hitting six-months high as market sentiment remained volatile after the Federal Reserve meeting minutes were revealed to the general public. Moreover, Greenbacks continued to remain under pressure from the single currency due to the fact that FED’s policy regarding interest rate hike remained unchanged and interest rate changes are expected in the month of June as in the present scenario health of global economy is major concern for the FED.

Janet Yellen, Chair, Federal Reserve on Thursday said that United States economy should not be perceived as a bubble economy and labor market was also gaining grounds. Furthermore, she also clarified that the decision that was made earlier by Federal Reserve to increase the interest rate in the month of December last year was not a mistake. After her comments, the currency strengthened for a while against Euro exchange rate.

In addition to, policy makers at European Central Bank also pointed out the fact that if it is needed they are ready to inject more stimulus, and following the announcement of ECB market sentiment on Euro exchange rate remained fragile. Peter Praet, chief economist, European Central Bank also stated that ECB was prepared to take necessary steps if new shocks arises in the euro zone economy. Moreover, Vito Constancio, Vice-President, ECB also communicated to the European Parliament that ECB is ready to take actions in order to stabilize price objective.

Consequently, Euro exchange rate reached 1.1397 against the greenbacks during early North American session and the currency rate consolidated at 1.1395 gaining 0.15%. However, single currency went down against the British pound sterling by 0.19% to trade at 0.8079. On the other hand, US dollar also lost its ground against the pound by 0.28% to trade at 1.4097. United Kingdom’s office for National Statistics also reported that manufacturing production reduced by 1.1% in the month of February as compared to the anticipated figure of 0.2% reduction in production manufacturing.

Moreover, year-on-year production fell by 1.8% in UK and the data also showed that industrial production also went down by 0.3% in the same month even though it was predicted that production might go up by 0.1%. In a another report released in United Kingdom also pointed out that U.K trade deficit have been reduced to £11.96 billion in the month of February from a trade deficit of £12.16 billion in the previous month. In contrast, economists had earlier predicted that trade deficit will reduce to £10.20 billion.

The US dollar compared to the Safe heaven also went higher, the major currency pair traded at 108.53. Moreover, Japanese Yen also remained under pressure after the comments which were made by the Japanese Finance Minster regarding the aggressive currency steps that they are not feasible at this time.

U.S dollar index which measures the strength of Greenbacks against the major currency pairs such as Japanese yen, Euro exchange rate and so on remained at 94.31 and the index fell by almost 0.20%.