The Euro has continued its strength today breaking through the US1.13.00 mark still riding high after yesterday’s dovish statement from the US Federal Reserve.
At 7.13pm (GMT) the EUR/USD was trading at US$1.13.18 after threatening to break below US$1.10.00 in yesterday’s trading,
Before yesterday’s Fed speech, the market had placed a more than 50 percent chance that the Fed would raise rates in June but now the figure has dropped significantly which lent some support to the Euro,
"The decision to keep policy unchanged came as no surprise. However, the Committee’s guidance on the future path for policy rates was more ‘dovish’ than both we and the markets expected. The immediate reaction has seen the US dollar and US Treasury yields fall sharply, and the probability that markets put on a June interest rate rise has fallen to 40% from 53% pre-announcement." Noted exchange traders from Lloyd’s.
Also helping the Euro’s cause today was better than expected industrial production figures from the Eurozone which came in at 2.1 percent against expectations of a 1.5 percent rise while the yearly figure faired even better coming in at 2.9 percent against a consensus of 0.8 percent.