Market Snapshot – Dollar Sold Further As Draghi Refuses to Talk Down the Euro

Dollar Hit Hard

It has been a busy day already which is going to get even more busy in the evening as the euro has made further inroads on the dollar. The dollar has been pushed to the backfoot by the weakness that is prevailing in the markets. The US treasury secretary said that he prefers to have a weaker dollar so that it would be helpful for the US economy and its trade. This was the final nail in the coffin for the dollar as it has been sold relentlessly till then. Though the selling of the dollar looks like a bit outstretched at the moment, there does not seem to be any respite for the dollar at this point of time. The dollar bulls can only hope that the euro takes a backseat and that the ECB sounds dovish when the ECB President Draghi holds his press conference. If he does not sound dovish, then it would be no surprise if the euro presses on and reaches 1.25 and further following the press meet. It is a pitiable state for the dollar that it has to depend on the weakness of the other currencies to hold its own.

Euro Pushes Through 1.25

So the ECB press meet did come along and to the surprise of the dollar bulls, Draghi chose to steer clear of any talk of excessive strength of the euro. He said that it was not the prerogative of the ECB to talk or interfere with the exchange rates and this looked as though it was a further green signal to sell of the dollar against the euro and we saw the EURUSD pair promptly make its way towards and the beyond the 1.25 region. The market was expecting Draghi to talk down the euro in a way of controlling its growing strength but the fact that he did not do anything of that sort was a disappointment to the dollar bulls who now seem to have given up.