The euro strengthened against other major currencies in the early European session on Tuesday, after the European Central bank President Mario Draghi signaled an upbeat economic outlook for the euro area.
Speaking at the ECB Forum on central banking in Portugal, the ECB chief Draghi said that all the signs now point to a strengthening and broadening recovery in the euro area. Deflationary forces have been replaced by reflationary ones.
Draghi said any adjustments to the monetary policy stance have to be made gradually.
“As the economy picks up we will need to be gradual when adjusting our policy parameters, so as to ensure that our stimulus accompanies the recovery amid the lingering uncertainties,” Draghi said.
Meanwhile, the International Monetary Fund recommended the Irish government to focus on rebuilding fiscal buffers, strengthening economic resilience and fostering sustainable and inclusive growth.
In the Asian trading today, the euro held steady against its major rivals.
In the European trading, the euro rose to a 6-day high of 0.8852 against the pound, an 8-day high of 1.0895 against the Swiss franc and nearly a 5-week high of 125.58 against the yen, from early lows of 0.8783, 1.0862 and 124.74, respectively. If the euro extends its uptrend, it is likely to find resistance around 0.89 against the pound, 1.09 against the franc and 126.00 against the yen.
Against the U.S. and the Canadian dollars, the euro advanced to near 2-week highs of 1.1255 and 1.4897 from early lows of 1.1179 and 1.4801, respectively. The euro may test resistance near 1.13 against the greenback and 1.50 against the loonie.
Against the Australian and the New Zealand dollars, the euro edged up to 1.4791 and 1.5377 from an early 6-day low of 1.4682 and more than a 2-month low of 1.5234, respectively. On the upside, 1.50 against the aussie and 1.57 against the kiwi are seen as the next resistance levels for the euro.
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