The Euro made gains against the dollar on Tuesday after Fed President Mario Draghi hinted that the emergency stimulus package that was implemented could start to be reduced.
The Euro made gains of 1 percent while the dollar index which measures the greenback against a basket of major currencies fell over half a percent to 96.846. Against the Japanese yen the dollar gained 0.1 percent at 111.910 yen.
Prospects of Economic Improvements in Europe
The Fed President said at a conference in Portugal that as the economic prospects in Europe improves, there was a chance of an adjustment of the sub-zero interest rates and bond purchases. He went on to say that this would be dependent on favorable global financing conditions and that there was still a need for monetary support. The markets reacted during his speech sending the euro to a high last seen in June, rising half a percent to $1.1277.
Focus on Fed Speeches
Investors are now focusing on the Fed speeches and whether they will raise interest rates again this year at their meeting in December. Fed Chair, Janet Yellen is scheduled to speak at the British Academy in London later today after Patrick Harker Philadelphia Fed President. Market pricing has only a 40 percent chance that there will be an interest rate hike, as many investors are skeptical.
The tightening of capital controls by the Bank of England saw the pound sterling mostly unchanged as it made a slight gain of 0.3 percent at $1.2756.
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