Forex Market Update: Euro Gains after comments from Jens Wiedmann


The euro gained against the U.S. dollar and the Japanese yen on Monday after comments from European Central Bank (ECB) policymaker Jens Weidmann. The dollar, meanwhile, edged higher against the yen.

The euro had come under pressure last week after the ECB President Mario Draghi hinted that the central bank might intervene if the single currency continued to strengthen. The euro had risen sharply in January, which raised concerns among some politicians in the region.

However, speculation that the ECB might act to stop the euro from strengthening further ended on Monday after ECB policymaker Weidmann said that a currency policy aimed at weakening the euro would lead to higher inflation. Weidmann said that discussions about an overvaluation of the euro are simply a diversion from governments’ task of sorting out their economies.

At last check on Monday, the euro was trading 0.4% higher at $1.3414. Earlier in the day, the single currency rose to $1.3427. Speaking to Reuters, Matthew Lifson, Senior Analyst and Trader at Cambridge Mercantile Group, said that given the fragility of the markets lately, that was all it took to bring the euro above $1.3400 and test the $1.3430 resistance area.

Win Thin, Global Head of Emerging Market Currency Strategy at Brown Brothers Harriman, told Reuters that the euro is in a consolidation mode right now, but the Eurogroup meeting should set the temperature for the rest of the week.

The euro rose 1.2% to 125.37 yen on Monday. The single currency hit an intra-day high of 125.44 yen on Monday.

The yen also weakened against the dollar ahead of Bank of Japan’s monetary policy decision later this week. At last check, the greenback was up 0.8% to 93.47 yen. The yen had rallied against the euro and the dollar on Friday following comments from the Japanese finance minister.

More Posts by this author


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.

You may also like...