EURUSD Higher on ECB Draghi Recovery Rhetoric
The euro has rallied strongly across the board, with European shares consolidating gains close to two year highs, after the ECB President Mario Draghi said he expects euro-zone conditions to gradually improve later in 2013. Draghi had referenced "positive contagion" and said that he was confident a recovery would start in the region this year.
The ECB president told reporters that Europe is turning a corner with regards to the ongoing debt crisis, and pointed out that borrowing costs through the so called "euro-zone" were now "significantly lower".
The key euro/dollar major currency pair moved nearly two cents to the upside, with a high of around $1.3270 printed during trading yesterday, after president Draghi advised that the ECB council was unanimous in its decision to hold borrowing rates. This decision was likewise aligned with the BOE (Bank of England) announcement which was also revealed on Thursday. Euro-zone interest rates have now been at this low level for the past six months following July's cut from 1%.
The EUR/USD is now trading near to the recent range resistance highs from late December 2012 and early January this year. A sustained move above this prior resistance level would likely be viewed as a constructive development from a EURUSD technical analysis perspective. In related analysis we note that the US dollar to Japanese Yen pair is now trading around 89.00; the JPY has broadly under performed in the near to mid term, now hitting the lowest level against the greenback since June 2010.