The Euro is trading slightly lower against its US counterpart in today’s trading after rallying for the past few days and some say this is just a small bump in the road and the European currency has further to climb.
At 6.10pm(GMT) the Euro was trading at $1.0873 down from $1.0925 in yesterday’s trading.
After Sundays French election result, the Eurozone is in a state of calm after the threat of a Eurosceptic coming to power subsided and raised speculation the European central Bank may start to tighten monetary policy.
ECB President Mario Draghi is to give a speech later in the week where analysts are predicting that the tone of the talk will be more bullish than expected earlier.
“He is expected to give more details about the Quantitative Easing (QE) exit plans at the June meeting, six months earlier than previously anticipated,” says Ipek Ozkardeskaya at London Capital Group. “In this respect, Draghi is expected to adopt his language at the communiqué as early as this week.”
Also, up until recently, it had been expected that the ECB would lower rates even further to boost the economy but that now seems like a long shot,
“The ECB may remove reference to the possibility of ‘lower’ rates,” is the message from Gajan Mahadevan, a Quantitative Strategist at Lloyds Bank.