European Central Bank’s Meeting Drove the Euro Lower

The euro-dollar (FXE) exchange rate declined 1.4% for the week ending June 15. The ECB’s (European Central Bank) monetary policy statement made it clear that there won’t be any interest rate changes at least until the summer of 2019. Another major announcement was that the ECB will end its quantitative easing program by the end of 2018. Clear communication from the ECB removed all of the speculations about a rate hike, which led to increased policy divergence between the US and the ECB. Last week, there was a sharp decline in the euro.