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Forex Flash: EUR & GBP recover on signs of US economic slowdown - BTMU

FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ note that the euro and pound squeezed higher against the US dollar yesterday in part driven by building evidence that the US economy appears to have lost some momentum heading into Q2.

Further, he notes that the pound also derived some support from the BoE’s decision to leave monetary policy unchanged as the stronger than expected service PMI survey for March signaled that the UK economy may expand modestly in Q1. He adds that the euro likely derived some support yesterday from ECB President Draghi’s reassuring comments that contagion so far from developments in Cyprus have been relatively limited and that it is neither a template nor a turning point. He also stressed that the ECB’s commitment to the euro is vastly underestimated. He finishes by writing, “However, a more negative development for the euro was that he signaled that the ECB is moving closer to further easing.”

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