The EUR rose on Friday against a basket of global currencies, extending its gains for the second day in a row against the dollar, hitting a two-year high amid investors’ assessment of the divergence of monetary policy between Europe and the United States, especially after recent comments by ECB Governor Mario Draghi. , With the possibility of raising USD interest rates for the third time this year.
The EURUSD pair is trading at 1.1645 from the opening price of 1.1628 by 7:45 GMT, after recording the highest 1.1677, the highest since August 24, 2015, and the lowest 1.1618.
The EUR ended yesterday’s trading up 1% against the USD, the fourth gain in the last five days, following the ECB’s decision to stabilize monetary policy with little change, and the acceleration of buying low-yielding currencies as fears mounted again about United States President Donald Trump.
At the end of a two days meeting, the ECB kept interest rates steady at a record low of 0.0% and the stimulus package for the economy at € 60 billion per month.
Mario Draghi, governor of the bank, said at his famous press conference that no date had yet been set for discussing any changes in the monetary stimulus program, but noted that the European monetary policy industry would reconsider the issue in the fall.
Draghi added that the economic data confirm the strength of the economic recovery in the euro zone and that low energy prices curb inflationary pressures. He pointed out that the rate of inflation does not exist at appropriate areas of the bank and stressed the bank’s flexibility if the situation worsens.
The dollar index fell to its lowest level in 11 months, reversing the continued selling of the USD currency against most of the currencies, especially in light of the decline in the possibility of the Federal Reserve to accelerate the pace of tightening monetary policy, raising interest rates for the third time this year.
The Federal Reserve is meeting next week amid broad expectations of keeping interest rates steady at 1.25%, especially after cautious testimony by Janet Yellen, the Reserve Chairman of Congress, after weak data on inflation levels in the country.
The USD currency has recently been under negative pressure as political tensions mount again over President Donald Trump, especially after reports that the adviser on investigations into the Russian intervention in the United States presidential election, Robert Mueller, has expanded the investigation. Trump told The New York Times that the investigation of his money is a red line.