The European Single Currency, Euro, on Thursday, January 25, extended its overnight rally to $1.2425, up 0.15 percent and going as high as $1.2428, its strongest since December 2014.
The euro zone economy may be roaring ahead though the expectation is that a rapidly strengthening euro may see ECB President Mario Draghi pour cold water on the view the bank is speeding towards an interest rate hike.
“The ECB could curb euro strength if it downplays the prospect of early monetary policy normalisation and warns against a rising currency,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.
“Such a stance by the ECB could be seen as a joint effort to verbally intervene after the BOJ made it clear earlier that it does not intend to normalise policy any time soon.”
The BOJ kept monetary settings unchanged as expected on Tuesday and Governor Haruhiko Kuroda hosed down market speculation of a shift away from ultra-easy policy later this year.