The European Single Currency, Euro, on Wednesday, August 16, held near the day’s lows after sources signaled European Central Bank chief Mario Draghi would not use his Jackson Hole appearance to signal policy change by the bank.
The euro fell 0.3 percent to $1.1701 and was trading near the day’s lows of 1.1691. It hit a 2-1/2 year high of $1.1911 earlier this month and is down nearly 2 percent from that peak.
The single currency was trading down 0.2 percent at 1.13960 francs per euro EURCHF=EBS.
The euro EUR=EBS has gained 11.5 percent so far this year against the dollar and is the best performing currency in the G10 FX space with most of its gains coming in recent months on growing bets that the European Central Bank will start unwinding its massive policy stimulus.
But the latest news dashed some expectations that the ECB will use the keenly watched annual Jackson Hole conference to chart a course out of stimulus.
“In the short term we are bearish on the euro/dollar as currency markets were expecting too much out of the ECB in the near term but in the medium term we are more constructive,” said Stephen Gallo, European head of FX strategy at BMO in London.
On a flows basis, inflows into European-focused equity funds have slowed noticeably after a spike earlier this month though bond outflows have also slowed indicating the currency’s weakness may be short-lived, reuters reports.
