The euro extended its run higher versus the dollar on Wednesday, hitting a year-high, following an upbeat outlook on the euro zone economy this week from European Central Bank (ECB) chief Mario Draghi.
Meanwhile, the US Republicans’ struggle to push through controversial health care legislation was fueling concerns about the chances of President Donald Trump passing his much-vaunted economic agenda, traders said.
The euro reached $1.1388 Wednesday, the highest level since a year earlier.
“Wednesday’s trading continued to be driven by Tuesday’s news, with little to challenge either Draghi’s... comments or the latest US health care reform stumble for market dominance,” said Connor Campbell, an analyst at Spreadex trading group.
“The euro had already managed a strong Tuesday performance after Draghi subtly hinted at a slight shift in the ECB’s approach to stimulus. Yet the currency soon received a second wind, hitting a 12-month high against the dollar following news that the Republicans had pushed back the Senate health care vote due to intra-party opposition,” he added.
European stock markets were lower in Wednesday trading, mirroring falls across Asia and on Wall Street overnight. Draghi on Tuesday said the EU was enjoying a newfound confidence that could unlock demand and investment. While he cautioned against winding down the bank’s easy money policy, analysts said the Italian was more hawkish than expected.
The European single currency was also up against the yen at levels not seen since April 2016, while the dollar was lower also on concerns about Trump’s agenda.

Source: Arab News