On Tuesday, EU had passed through the 315 billion euro investment plan aiming at reviving European economy, proposed by Jean Claude, the president of European Commision. It will lead to a large amount of money poured into the market, which then push downward pressure on weaken euro.
This plan is awaiting the approval from European Parliament.
In the same day, the Prime Minister of the UK David Cameron want to hold a referendum about the country’s exit from EU because the conflict between UK and EU about immigration policy. A survey carried out at the end of 2014 showed that 36% of British people favour leaving the European Union. They said Britain had contributed too much for European budget.
Today euro rises slightly 0.3% to $1.07165 in the earlier of the day and then turned down. EUR/USD losses 0.22% from $1.06776, traded at $1.06537 in 3:36 p.m. GMT+7.
Still there is no factors that could save the euro. The dollar is remaining in the bullish. The relative strength index of dollar DXY reached 99.450 in 5:48 p.m. GMT+7.
If U.S. still holds on raising interest rate after the meeting in March 18th, the upward trend of the dollar may be halted, diminishing pressure on the euro. Or when QE takes clear effect on the economy of the region, the euro will come back to life. Besides if the investment plan above can work effectively in creating growth engine for the region, the confidence of investors can be reinforced, the euro will rebound.
In the short term, euro remain in bearish market, on speculation that QE has started for 3 days, EU promoted on investment plan and Greece sill cannot unlock the 7 billion euro bailout.