June Forex Market Update (week 1)

The euro rose from a four-month low against the dollar amid speculation the European Central Bank’s (ECB) package of growth-boosting measures isn’t enough to weaken the currency as part of efforts to bolster economic growth.

The 18-nation currency dropped earlier after the ECB became the first major central bank to charge fees on deposits and unveiled additional plans to support an economy that’s threatened by deflation. While calling the measures “a significant package,” ECB President Mario Draghi said policy makers are willing to do more.

The ECB cut its deposit rate to minus 0.1 percent, it lowered its key interest rate to a record 0.15 percent and unleashed a package of measures including targeted long-term loans and ending the sterilization of its asset purchases however it was clear to see by the price action recovery that the market viewed the statement as not nearly as aggressive as it could have been and thus making it difficult for the Euro to weaken further.