The common currency of the European Union slumped during the Wednesday trade session against the world's reserve currency, tugged down by the remarks of President Mario Draghi with the European Central Bank, who said the institution's accommodative monetary policies will remain. Bloomberg reports.
Since U.S. Federal Reserve Chairman Ben Bernanke one week ago said the body he leads is aiming to taper monetary stimulus in the coming months and close it by year's end, the euro's losses against the greenback have climbed past 2 percent.
"The U.S. economy is still in better shape than Europe, which is still very weak and can't withstand higher (short-term) rates at this time and rate spreads will continue to pressure euro/dollar lower," FX strategist Paul Robson with RBS told Reuters on Wednesday. "Draghi on balance will have to sound a bit more dovish to make sure that markets don't start pricing in (an interest) rate hike too early."
The euro's losses on Wednesday pushed to 0.4 percent against the U.S. dollar.
The poor performance of the 17-nation monetary unit on Wednesday tugged it to its 21-day trough against the U.S. dollar, Reuters reports.
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