In an early hours of European trade today i.e. Thursday, the USD slipped while the Euro gained ahead of the greenback.
The dollar index which was otherwise tracking the greenback against six different currencies was recorded as low as 0.2% at 93.090 however the currency pair of EUR/US$ successfully managed to close at a high accumulating 0.2% at 1.1829 respectively.
However, still, the exchange rate of the EUR/USD currency pair remained below the average rate of 1.20 which it had managed to acquire past week.
While it is not expected in the near future that there will be any changes made in the interest rates, however, there is a growing unrest amongst the officials of ECB due to the 6% appreciation gained by the Euro over US Dollars which was though facing a low in the month of June.
According to a research report duly published by Barclays, they believe that even though the world is facing the Covid-19 Pandemic yet the hardships caused to the economic conditions, will not compel ECBP to change their monetary policy in their meeting scheduled to be held in mid-September. It would be completely inappropriate at this time for ECB to change its monetary policy but rather stimulus is expected to occur at the end of this year or at the start of 2021, depending upon the circumstances prevailing at the time.
In the meanwhile, the European Union is seriously considering the possibility of initiating a full-fledged legal action against the premier of the United Kingdom, Boris Johnson, who is likely to go against the “Withdrawal Agreement” by breaching the contract which will have far-reaching effect and may lead to an end of bilateral trading between Europe and UK. Tensions on both sides have reaped exponentially.
In case the premier of UK decides to breach the contract, then there is a genuine apprehension amongst the traders of both countries that there will be no trading agreement between the two which would jeopardize a fair piece of business to the EU single market as well as to those who are part of the forex trading industry within UK.