EURUSD and GBPUSD Fall Back As Dollar Stabilizes
GBPUSD, EURUSD talking points:
- GBPUSD edged lower Wednesday after coming within whisker of the 1.40 level.
- Meanwhile, EURUSD was hit by a comment from Draghi that the ECB needs to see further evidence that inflation is rising.
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GBPUSD, EURUSD weaken
The Euro fell against the US Dollar in European trading hours Wednesday after European Central Bank President Mario Draghi said that the Euro-Zone central bank needs more evidence that inflation is rising. At 1.2% year/year in February, headline inflation remains well below the ECB’s target of below but close to 2%.
“We currently see inflation converging towards our aim over the medium term, and we are more confident than in the past this convergence will come to pass,” Draghi told a conference. “But we still need to see further evidence that inflation dynamics are moving in the right direction.
“There is a very clear condition for us to bring net asset purchases to an end: we need to see a sustained adjustment in the path of inflation towards our aim,” he added.
Draghi’s comments were seen as pushing an end to the ECB’s bond buying program further into the future and in response EURUSD weakened despite continuing concerns about the possibility of US tariffs on Chinese imports and the sacking of Rex Tillerson as US Secretary of State.
EURUSD Price Chart, Five-Minute Timeframe (March 14, 2018)
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Meanwhile, GBPUSD rose close to the psychologically-important 1.40 level but failed to break through and then eased back as traders worried about the growing war of words between the UK and Russia after the poisoning of a Russian former spy in London. Nonetheless, GBP remains in demand on hopes that a Brexit transition deal will be agreed eventually between the UK and the EU.
GBPUSD Price Chart, Five-Minute Timeframe (March 14, 2018)
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.