Euro Consolidates at 1.30 - 19.12.2011
US Dollar
The dollar strengthened slightly against its major rivals in Asian trading hours today, however the gains were limited and the markets were relatively stable at the beginning of the European trading session. Although investors are still sensitive to the crisis developments in Europe and the slowing global growth, while the United States, recently showing signs of recovery, may become one of few islands of confidence in the following weeks.
Euro
The euro maintains the level 1.30 against the US dollar, as the single currency failed to extend its Friday’s gains ahead of today’s meeting of the European finance ministers, who will discuss deadlines for drawing additional aid and to form new budget rules. At the same time, despite a wide criticism, the European Central Bank President Mario Draghi reiterated that the bank will step up bond purchases to tame the sovereign debt crisis, saying it can’t overstep its mandate.
“People have to accept that we have to, and always will, act in accordance with our mandate and within our legal foundations,” Draghi told the Financial Times. “The important thing is to restore the trust of the people in our continent. We won’t achieve that by destroying the credibility of the ECB.” The euro remained in a narrow range against the greenback today – 1.2982-1.3040.
Australian Dollar
The Australian dollar remains below parity against the US counterpart for the third consecutive day. The Reserve Bank of Australia is scheduled to release the minutes of the December policy meeting, when it cut interest rates for a second straight month to 4.25%. The Aussie dropped in the morning to 0.9900 before recovering gradually to 0.9950.
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