Well that didn’t take long.
On the first trading day of 2015, ECB President Mario Draghi’s comments sent the Euro plummeting toward the 1.20 line. Draghi told German newspaper Handelsblatt that more easing action was likely early this year, as the risks of deflation well outweighed those of inflation.
With the Eurozone in a continued economic funk, the question in many traders’ minds is “How low can it go?”
As of 9:45am GMT Friday, the EURUSD had traded as low as 1.2035, nearing five year lows.
EURUSD past six months. Very one-directional. Source: Google Finance.
The 1.20 seems to be a magic number in the Forex sector this year. Another important currency pair, the EURCHF (Euro-Swiss Franc) has been treading water near the 1.20 line, with the Swiss National Bank taking a series of actions to defend that level.
Should be an interesting beginning to the trading year in 2015.