The EUR/USD currency pair today remained unchanged despite market rumors that the European Central Bank President, Mario Draghi, would include QE tapering in his Jackson Hole meeting next month. Janet Yellen‘s dovish comments during her two-day Humphrey-Hawkins testimony before Congress had a negative impact on the US dollar, which has been largely weaker against the euro in today’s session.
The EUR/USD pair has been trading in a 30 point range despite the ECB tapering headlines, which had minimal impact on the pair.
The latest Eurostat report on the Eurozone’s trade balance barely affected the currency pair despite missing expectations. The Eurozone’s trade balance for May came in at €19.7 billion versus the market consensus of €20.2 billion. The ECB headlines specifically avoided mentioning a specific end-date to its quantitative easing program, which is what sparked the rumors. Although the ECB has previously indicated that tapering would commence in 2018, there is significant pressure on the bank to start tapering much sooner.
The US dollar was largely weaker against the euro in today’s session as markets were rattled by Federal Reserve chair’s dovish comments regarding the US economy. Janet Yellen indicated that the US economy was experiencing inflation below the Fed’s 2% target.
The currency pair’s future performance is likely to be affected by the release of the US CPI data scheduled for 12:30 GMT today.
The EUR/USD was trading at 1.1415 as at 12:03 GMT having risen from a daily low of 1.1390. The EUR/JPY was trading at 129.07 having declined from a high of 129.51.
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