In Asian trading today, the common currency Euro remained steady, holding onto yesterday’s gains following the hawkish comments issued by European Central Bank president, Jean-Claude Trichet. As reported at 3:19 p.m. (JST) in Tokyo, the Euro was trading against the U.S. Dollar at $1.3970, just off the $1.3976 high struck yesterday on the EBS trading platform. One forex analyst in Hong Kong believes the Euro will retain its strength over the next few weeks, possibly testing the November peak of $1.4283.
At the conclusion of the ECB policy setting meeting yesterday, the ECB president took a tough stance against inflationary pressures, signaling a possible interest rate hike, perhaps as soon as next month. Markets had been hopeful of some intimation that rate hike discussions were underway, but were unprepared for Trichet’s frankness.
The Euro was also higher against the New Zealand and Australian Dollars, striking a 10-month peak of NZ$1.8935 and a 5-week peak of A$1.3800. It also held firm against the Swiss Franc, surging 1.6% yesterday to trade at 1.3007 Swiss Francs. Support for the Euro is seen in the near term, but continuing fiscal debt worries among the peripheral Eurozone countries may pressure the common currency.