FOREX-Euro hovers near two-year low vs dollar as ECB disappoints markets

 (Due to the Good Friday holiday on Friday April 15 there will be no FOREX reports.)
    * Euro falls to one-month low against sterling
    * Dollar index hits two-year high on retail sales data
    * ECB confirms plans to cut bond purchases in third quarter

    By Hannah Lang
    April 14 (Reuters) - The euro plunged to a two-year low against the U.S. dollar on Thursday as comments
from European Central Bank President Christine Lagarde were viewed as a sign that the ECB was in no rush to
raise interest rates, in contrast with an aggressive monetary policy tightening effort by the U.S. Federal
    The European single currency fell to $1.0758, the lowest level since April 2020. It was last
down 0.57% at $1.0823.
    Lagarde said there was no clear timeframe for when rates would start to rise, adding that it could be
weeks or even several months after the end of the ECB's stimulus scheme.
    "We'll deal with interest rates when we get there," she added.
    The ECB on Thursday concluded its latest meeting with cautious steps to unwind support and avoided a
hard schedule. It confirmed plans to cut bond purchases, commonly known as quantitative easing, this
quarter, then end them at some point in the third quarter.
    Against sterling, the euro slid to a one-month low and was last down 0.34% at 82.74 pence.
    Lagarde's comments were in stark contrast to those of Fed Chair Jerome Powell, said Joseph Trevisani,
senior analyst at
    “They could have taken a book from what Jerome Powell has done, and that is to be aggressive
rhetorically. Ms. Lagarde did not seem disposed to do that. She was more concerned apparently, and maybe
understandably, about the Ukraine war and its impact on Europe," he said.
    In addition to pushing up gasoline prices, the Russia-Ukraine war, now in its second month, has led to a
global surge in food prices as Russia and Ukraine are major exporters of commodities including wheat and
sunflower oil.
    "Frankly, given how uncertain conditions are at the moment, Lagarde's caution can be justified, but it
is fair to say that markets were expecting a bit more sprinkle after the eventful March meeting," said Ima
Sammani, FX market analyst at Monex Europe. 
    In late afternoon trading, the dollar index, which measures the greenback against six peers, rose
0.534% to 100.32 after earlier hitting 100.76, the highest level since April 2020.
    The dollar extended gains after data showed U.S. retail sales increased in March, mostly boosted by
higher gasoline and food prices.
    The battered yen saw some respite, making a small recovery from a 20-year low hit against the
dollar. In afternoon trading, it weakened 0.23% versus the greenback at 125.93 per dollar. 
    More than three-quarters of Japanese firms say the yen has declined to the point of being detrimental to
their business, a Reuters poll found. 
    Other central banks tightened monetary policy, reinforcing expectations of higher interest rates
    The Bank of Korea surprised markets with a rate hike, while the Monetary Authority of Singapore also
tightened policy, sending the Singapore dollar to its highest level since February.
    On Wednesday, the Bank of Canada and the Reserve Bank of New Zealand both raised rates by 50 basis
points, the largest hike for each in around 20 years.
    Bitcoin last fell 3.09% to $39,968.59.
    Currency bid prices at 2:15PM (1815 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
 Dollar index                 100.2900       99.7870     +0.51%         4.837%        +100.7600   +99.5670
 Euro/Dollar                  $1.0828        $1.0893     -0.59%         -4.75%        +$1.0924    +$1.0758
 Dollar/Yen                   125.9300       125.6600    +0.22%         +9.40%        +126.0100   +125.0950
 Euro/Yen                     136.37         136.83      -0.34%         +4.64%        +136.9300   +135.5300
 Dollar/Swiss                 0.9427         0.9347      +0.88%         +3.37%        +0.9433     +0.9324
 Sterling/Dollar              $1.3082        $1.3117     -0.28%         -3.28%        +$1.3147    +$1.3034
 Dollar/Canadian              1.2590         1.2564      +0.20%         -0.43%        +1.2641     +1.2522
 Aussie/Dollar                $0.7423        $0.7453     -0.40%         +2.12%        +$0.7468    +$0.7397
 Euro/Swiss                   1.0207         1.0180      +0.27%         -1.56%        +1.0213     +1.0140
 Euro/Sterling                0.8275         0.8302      -0.33%         -1.49%        +0.8314     +0.8251
 NZ                           $0.6789        $0.6798     -0.14%         -0.82%        +$0.6834    +$0.6768
 Dollar/Norway                8.7765         8.7565      +0.74%         +0.14%        +8.8330     +8.7380
 Euro/Norway                  9.5026         9.5206      -0.19%         -5.10%        +9.5624     +9.4912
 Dollar/Sweden                9.5163         9.4714      -0.12%         +5.53%        +9.5755     +9.4191
 Euro/Sweden                  10.3052        10.3173     -0.12%         +0.70%        +10.3266    +10.2789
 (Reporting by Hannah Lang; additional reporting by Joice Alves; Editing by Nick Macfie, Chizu Nomiyama, Jan
Harvey and Leslie Adler)


Leave a Reply