Friday, June 5, 2009

Daily Currency Analysis


EUR/US$

The Euro rallied to levels above 1.42 against the dollar in early Europe on Thursday, but was unable to sustain the gains and dipped back towards the 1.4150 level ahead of the European interest rate decisions.

The ECB left interest rates on hold at 1.00% following the latest council meeting which was in line with market expectations. At the press conference following the decision, President Trichet was slightly more optimistic over the economy than in recent comments. The forecasts for 2009 were still downgraded by the bank with an estimate that GDP would decline by 5.1% for 2009 with a marginal return to growth for 2010.

The ECB confirmed that it would by EUR60bn in covered bonds with Trichet refusing to make further comments on the possibility of additional purchases. (more)

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