EUR/USD Moves Above 1.21 After Fed Chair Powell’s Speech
- The euro climbs to 1.2149 on Thursday
- Broad US dollar weakness continues to weigh on the currency markets
EUR/USD Moves Above 1.21
The Euro moved to a seven-week high against the US dollar early on Thursday, following the press conference of Federal Reserve Chairman Jerome Powell. EUR/USD traders anticipated the speech of Mr. Powell as they expected to hear whether the central bank will make any changes to its monetary policy.
In a largely expected move, Jay Powell reiterated the Fed remains determined to provide the economy with as much help as needed. The Federal Reserve made no changes to its policy and it will continue to buy $120bn of assets a month. The interest rate was also kept near zero to keep borrowing costs low so that the economy could recover more quickly.
USD Depreciation Across the Board
On the hot topic of inflation, Jay Powell played down concerns over rising prices, threatening to overheat the economy. “If we see inflation moving materially above 2% in a persistent way that risks inflation expectations drifting up, then we will use our tools to guide inflation and expectations back down to 2%,” Chairman Powell said.
As a result, the US dollar depreciated across the board. The EUR/USD climbed to a high of 1.2134 during the speech and today reached a session high of 1.2149. In April, the EUR/USD has been making solid progress to the upside, advancing by more than 3.5% from a low of 1.1712 to today’s peak.
The USD/CAD declined further to a low of 1.2287 earlier today. The level was last seen in early February 2018. The USD/CAD has been gradually depreciating since the pandemic hit in March last year. Also in April, the USD/CHF has erased half of the gains made during the first quarter of the year. For the period of January through March, the USD/CHF appreciated over 8%, while in April, it skittered down by 3.98%. The USD/CHF is currently hovering around 0.91.
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