The pair has been boosted by the euro strength as ECB seeks to allay fears of a slowdown
The EURUSD pair has managed to recover from the lows of the range as the dollar was on the backfoot for much of the day yesterday. There was no specific reason for the weakness in the dollar but the continuing concerns over the various geopolitical and market risks all around the world has helped to keep the pressure on the dollar over the last few days.
EURUSD Remains Strong
This is expected to continue in the short term as the focus now shifts away from the dollar and to the Eurozone. There have been conflicting reports over the last few days on the actual strength of the economy of this region. After having reached its peaks towards the end of the last year, the incoming data from the region has basically tapered off and this has raised concerns on whether the ECB would be able to taper off the QE and end it by the end of the year as planned. The ECB is only one of bearish central banks around and they would need a major push from the data for them to do this.
This major push had come towards the end of last year but the tapering off did indeed place some doubts and this was one of the reasons why the euro had moved towards the lows of its range last week. But yesterday, the ECB and Draghi sought to allay those doubts as they expressed confidence that the economy would grow and would continue to flourish and this could indicate that their job of tapering and ending the QE would become easier.
This was the message that they sought to give the markets and this helped to give a boost to the euro which helped the EURUSD pair to push through the 1.23 region where it trades as of this writing. Looking ahead to the rest of the day, we have the PPI data from the US later in the day but that is unlikely to have a major impact on the markets. We should continue to see some consolidation and decent volatility.