Summary:

The ECB announcement to potentially tighten monetary policy is working in the EUR favor.
With the Fed's hawkish tone and the ECB’s dovish tone, it is unlikely the EUR price will increase much more.
AUD/NZD and EUR/CHF also see increases since market opening.

EUR is unlikely to increase much more.

Since the market opened this morning the price of the EUR/USD has gone from a decrease in value to a 0.5% price increase since the market closed yesterday. This price increase comes with the ECB announcements to possibly tighten monetary policy in the future causing improving trader confidence. However, the market sentiment for this currency pair is still reflecting a bearish tone. This currency pair is likely going to continuously reflect volatility in the future and possibly see the USD strengthening. With the Federal Reserve tightening monetary policy, their interest rates are significantly stronger than those of the European Union and there is almost no chance of the ECB tightening monetary policy. It is unlikely we will see the EUR strengthening much more.

EUR/USD Price Chart

ECB announcements helping the EUR strengthen.

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Since the market opened this morning, the market sentiment is reflecting a mixed signal. With the second round of the French elections this Sunday acting as a key risk event for the price of the EURO, the event will be a key driver for the price of the EUR in the coming days. However, confidence in the EUR has been temporarily restored thanks to the ECB announcing its plans to tighten monetary policy in the future, causing the EUR to strengthen since the market opened.

EUR/GBP Price Chart

AUD/NZD Strengthens this morning.

Due to trading in the same region, this currency pair is affected by actual local economic changes and less so by global factors and risk trends. Since the market opened this morning the AUD has strengthened against the NZD.

AUD/NZD Price Chart

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EUR/CHF

The Strengthening of the Euro against the Swiss Franc comes hand-in-hand with the factors already mentioned, the ECB announcement being a driving factor for this, however, whether or not we can expect this increase to continue is in question.

EUR/CHF Price Chart

Sources: finance.yahoo.com, dailyfx.com, tradingview.com

Rebecca Duthie

Remote Editor and writer Intern

FXMAG.COM

Rebecca has a bachelors degree in Investment Management, a Post Graduate Diploma in Financial Planning and is currently enrolled in a Masters program in International Management with a Specialization in International Finance.

ECB Announcements to Possibly Tighten Monetary Policy Strengthens the Euro. EUR/USD, EUR/GBP, AUD/NZD and EUR/CHF All Increased