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Forex Market Update: Euro Edges Higher against Dollar and Yen

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The euro edged higher against the U.S. dollar and the Japanese yen in mid-day trading on Monday following comments from European Central Bank’s (ECB) Jens Weidmann.

The single currency had risen sharply against the dollar and yen in January this year as the euro zone economy showed signs of stabilizing. However, a strengthening euro has raised concerns as it will have a negative impact on the region’s exports. The euro came under pressure last week amid political uncertainty in Spain and Italy, and following comments from ECB President Mario Draghi on the state of the euro zone economy and a stronger euro.

Draghi’s comments suggested that the ECB might intervene if the euro continues strengthen against the dollar and the yen. However, ECB policymaker Weidmann on Monday dismissed talk of the central bank intervening to weaken the single currency.

At last check on Monday, the euro was trading 0.4% higher at $1.3418. The single currency rose to an intra-day high of $1.3425. Against the Japanese yen, the euro was up 1.2% to 125.34 yen, at last check, after hitting an intra-day high of 125.44.

With central banks across the world implementing monetary easing measures, there are concerns that this may lead to currency wars.

Speaking to Reuters, Kit Juckes, foreign exchange strategist at Societe Generale in London, said that the G20 meeting in Moscow this week seems certain to focus on currency wars but beyond a bland call for countries not to engage in competitive devaluations it is hard to see what concrete steps can be taken at this stage. Juckes further said that the currency war is a product easy Fed policy, and the U.S. is winning comfortably. Juckes added that Japan’s response can’t be criticized in the context of the deflation the country has been stuck in and Europe cannot agree on a common position.

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edliston
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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