Euro slumps as ECB stands pat on easy policy stance

NEW YORK: The euro fell on Thursday as the European Central Bank clung to its easy monetary policy and signalled no change in its timetable to move away from its ultra low rate policy and to end its asset bond purchase program.

ECB President Mario Draghi said at a press conference following the ECB’s policy decision while confident about regional inflation achieving ECB’s 2-percent goal, rising tariffs and other trade barriers would hurt the growth of the 19-member economic bloc.

“You saw Draghi definitely taking a dovish approach,” said Chuck Tomes, senior investment analyst at Manulife Asset Management in Boston. “He’s focused on the current environment where he’s concerned about trade.”

Draghi’s reticence persisted in the aftermath of a meeting between US President Donald Trump and European Commission chief Jean-Claude Juncker on Wednesday.

Trump agreed to refrain from slapping tariffs on European-made cars, while the two sides started discussions on reducing other trade barriers in a bid to avert a transatlantic trade war.

Still doubts remain on what would transpire from the talks, analysts said.

At 10:52 a.m. (1452 GMT), the euro was down 0.6 percent at $1.16580 and 0.46 percent lower at 129.525 yen , EBS data showed.

In addition to the euro, the greenback strengthened against other major currencies.

The US economy has continued to exhibited solid growth despite trade tensions with other countries.

Domestic core capital goods orders rose 0.6 percent in June, beating a forecast of a 0.4 percent increase among analysts polled by Reuters.

An index that tracks the dollar versus six major currencies

was up 0.3 percent at 94.640, rebounding from a two-week low reached earlier Thursday.

Meanwhile, another drop by the Chinese currency after Wednesday’s bounce undermined broader risk appetite in markets.

The offshore yuan fell 0.8 percent at 6.8082 to the dollar, wiping out all of Wednesday’s gain.—Reuters