The greenback gained on Monday against its major counterparts in reaction to the comments of European Central Bank’s President Mario Draghi who expressed his concerns over the future outlook of the region and also disclosed the possibility of expansion of bond purchase program from the central bank.
Currency Analyst, David Song from DailyFX commented, “It’s becoming pretty clear that the Governing Council will continue to resist calls for a large-scale asset purchase plan, and we may see the ECB push the benchmark interest rate below 1.00% in 2012 as the region faces an increased risk of a major economic downturn in the following year,” he further added, “Still, with many investors calling for the demise of the single currency, the central bank may have little choice but to further expand its nonstandard measures as European policy makers struggle to stem the risk for contagion.”
The dollar index DXY which measures the US dollar’s performance against its six major rival currencies gained to 80.374 on Monday as compared to 80.216 on Tuesday’s late trading hours. The euro fell to 1.2997 versus the greenback as compared to 1.3030 on Friday’s North American trading session. The single currency saw further selling pressure in the market after the news that European Union Finance ministers disclosed that EU member countries agreed to additional bailout funding. Most of analysts believe that 17-nations shared currency now look fundamentally weak.
Among other currencies, the British Pound fell to 1.5497 versus the US dollar as compared to 1.5507 on late Friday. Against the Japanese yen, the US dollar fell to 78.03 as compared to 77.82 on Friday’s late trading hours.
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