Euro dips after Juncker warning

Published: 16 Jan at 9 AM Tags: Euro, Dollar,

The euro has fallen against the yen and the dollar following comments by Jean-Claude Juncker, chairman of Europe’s finance ministers, that the single currency is dangerously high. The euro fell 0.6 per cent against the Japanese currency to 117.28 yen. However, traders are confident that the dip was caused by profit taking and does not represent the start of a serious downward trend.

The euro also slipped 0.1 per cent against the dollar to $1.3289. Confidence about economic recovery in the eurozone coming from the European Central Bank has seen the euro gain around 3 per cent against the greenback in recent sessions.

The dollar has not moved much against other major currencies as the focus remains firmly on the euro and the yen. Against the Australian dollar the US dollar remained steady at $1.0561.

The yen has extended its gain following comments by Economics Minister Akira Amari that excessive weakness in the currency could cause an increase in the cost of imports which will damage the livelihood of Japanese citizens. The dollar has dropped against the yen to 88.06 yen.

The rebound in the Japanese currency is being seen by many as a short term reversal as the country’s Prime Minister Shinzo Abe pushes ahead with extreme measures to tackle deflation.