Forex Market Update: Euro Gains against Dollar after the ECB Keeps its Interest Rate Policy Unchanged

The euro climbed against the U.S. dollar on Thursday as the European Central Bank (ECB), in-line with expectations, left its interest rate policy, unchanged.

Earlier during European trading hours, the euro climbed to its near one-month high against the U.S. dollar amid rising speculation that the European Central Bank will not provide any more economic stimulating measures.

The euro has been shaky in the recent past as Investors took positions against the common currency after policymakers from the ECB hinted at possible further cut in benchmark interest rates. Speculation was also rife that the central bank might bring the bank rate down to negative.

However, some recent economic data releases from the euro zone, especially from Europe’s growth engine, Germany– suggested that the economy was rebounding.

Meanwhile, investors will keep an eye on the ECB President Mario Draghi’s monthly press conference at 8:30 a.m. EST. Market participants will be keen to know whether the Central Bank has still kept all options open, in case economic recovery stumbles.

At last check, the euro gained 0.17% to $1.3115.

Commenting over possible further rise in the euro, Peter Kinsella, currency strategist at Commerzbank, said, “The question is how far can the euro go and to my mind, if Draghi rules out negative interest rates, we could see the euro higher.”

“But, we think Draghi will try and talk down the euro and hence see any bounce to $1.32 as a selling opportunity,” added Kinsella.

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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.