Euro Ends Rally on ECB Extended Stimulus

The European single currency posted its first day of decline versus the greenback this week after the regional financial regulator affirmed that some of its stimulus to help the economy to recover will last for as long as they are necessary, declining optimism towards the Eurozone.

It wasn’t a surprise that interest rates remained unchanged today in the Eurozone at a record low of 1 percent, but a comment made by European Central Bank President
Jean-Claude Trichet stating that one-month refinancing operations at a fixed rate with full allotment will remain for a longer period fueled speculations that the European countries using the single currency still need a stronger support for the ECB to stabilize their economies, which decreased appeal for the euro in foreign-exchange markets after 3 consecutive days of gains.

Even if pessimism towards Greece faded considerably this week, the practical economic conditions in Europe seem disappoint, as data released hasn’t produced enough evidences of a solid recovery in most of EU countries using the euro, but it was definitely reduce the euro’s downtrend speed and strength.

EUR/USD traded at 1.3654 as of 14:35 GMT from as high as 1.3735 yesterday.

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