Euro dives as Markets over-interpreted ECB message

On Thursday, the Euro dipped to $1.0741 in early sessions having drifted down from a 4-1/2-month high of $1.0906, as the European Central Bank (ECB) showed no sign of stepping away from monetary easing anytime soon.

A report by Thomson Reuters showed that the ECB policymakers were cautious of changing their policy message after tweaks this month had raised expectations of the Central Bank ending its super easy policy and eventually hiking interest rates.

Meanwhile, the Dollar is hovering near a one-week high against its major counterparts till this morning, after getting support from various Federal Reserve officials’ remarks. Chicago Fed President Charles Evans, a voter on the policy setting Federal Open Market Committee, said that he supports further interest rate hikes this year given progress on the Fed’s goals of full employment and stable inflation.

Boston Fed President Eric Rosengren and San Francisco Fed President John Williams also backed multiple rate hikes and stated that the Federal Reserve should raise rates three more times in 2017.

As for the Canadian Dollar, the currency rose more than 2% against the US Dollar on Wednesday as Oil prices, one of Canada’s major exports, surged for the second day in a row. The Energy Information Administration reported that US Crude inventories grew less than expected to 900,000 barrels in the week to March 24. Meanwhile Libyan supply disruptions and expectations that an output cut led by the Organization of Petroleum Exporting Countries would be extended helped sending Oil prices higher.