Euro is a little lower across the board today after remarks from Peter Praet. Indications from Praet seem to contradict the decision announced by ECB last week. The euro is weaker, but it is not below the general range that it has been trading in for the last few months.
Last week, Mario Draghi, the President of the ECB, indicated that they would not cut rates anymore. Policymakers would try to find other ways to stimulate the euro zone economy. The euro has been mostly stronger since those remarks.
Today, the euro is pulling back a little bit following the comments of ECB member Praet. He seemed to indicate that interest rates couldn’t go lower, despite the official ECB announcement. However, a number of analysts and economists are wondering if perhaps low rates have run their course. Recent rate cuts by other central banks have not been very effective, and that includes recent rate moves by the ECB.
For now, the euro might be a little weaker, but if policymakers want to see the euro weaken to a level that stimulates the economy, they will need a new strategy.
At 13:43 GMT EUR/USD is down to 1.1287 from the open at 1.1319. EUR/GBP is down to 0.7786 from the open at 0.7816. EUR/JPY is down to 125.9200 from the open at 126.0650.
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