Euro Exchange Rate Against the Dollar Fluctuated Significantly

In the currency markets last week, the euro exchange rate against the dollar fluctuated significantly due to messages from the American and European central banks, ending on Friday at nearly the same level as a week earlier.

The euro exchange rate against the US currency was 1.3280 dollars at the end of trading on Friday, while a week earlier it was 1.3275 dollars.

In relation to the Japanese currency, the price of the euro rose by 0.7 percent to 131.35 yen.

The dollar also strengthened against the Japanese currency by 0.7 percent, reaching an exchange rate of 98.95 yen.

On Wednesday, the euro exchange rate approached the level of 1.3300 dollars, as the US currency came under pressure after leaders of the central American bank did not provide new signals that they were preparing to reduce stimulus monetary programs.

However, by Thursday, the price of the euro fell below 1.32 dollars, as the European Central Bank maintained its key interest rate at a record low of 0.5 percent, and its president Mario Draghi indicated that there are risks of economic weakening, which justifies the conduct of a loose monetary policy in the eurozone.

On Friday, however, the euro exchange rate broke back deep into the area above 1.3250 dollars as weaker-than-expected employment data in the US raised questions about the possibility of a change in the Fed’s monetary policy.

In July, American employers opened 162,000 new jobs, less than the 184,000 that was expected.

Support for the dollar exchange rate this year has mainly come from expectations that the Fed could begin to reduce its stimulus programs as early as September. These speculations have somewhat subsided in recent weeks, especially after the employment data.

“The American economy is on fragile foundations regarding both gross domestic product and employment. Until these foundations strengthen, the Fed will be forced to continue to lean towards a loose monetary policy,” says Douglas Borthwick, CEO of Chapdelaine Foreign Exchange.