Dollar Stands Tall after ECB’s Dovish QE Taper Weakens Euro
The dollar was buoyant on Friday, poised for weekly gains, while the euro fell to its lowest level in three months after the European Central Bank announced a so-called 'dovish tapering' of its bond purchasing program and lowered the possibility that it would raise interest rates in 2018.
The dollar index rose 0.2 percent to 94.800, trading at three-month highs and bound for a weekly gain of 1.1 percent. Against the yen, the greenback rose 0.15 percent to 114.155 yen, close to this week's three-month peak of 114.245 reached on Wednesday. For the week, it was up 0.5 percent.
The ECB prolong its quantitative easing programme by nine months to September 2018, and left the door open to further extension after the said period. The central bank said it would begin reducing its monthly rate of buying by 50 percent to 30 billion euros beginning in January.
ECB President Mario Draghi said that a significant degree of monetary stimulus is still needed as inflation in the region remains muted and failed to show signs of a sustained upward movement.
The euro fell 0.15 percent at $1.1633 after hitting $1.624, its lowest trading level since July 26. For the week, it is trading 1.3 percent lower. The common currency weakened against the dollar as the ECB's cautious strategy underlined the difference between the Federal Reserve, which is positioned to lift its rates once more this December.
News are provided byInstaForex.