Euro Surges To 27-Month High, Worrying The ECB

Access To Financial Markets Made Easy • Sep 2, 2020 at 4:10 AM EDT

The EURUSD exchange rate surged to a 27-month high yesterday, finally breaking the key $1.20 level.

The EURUSD exchange rate surged to a 27-month high yesterday, finally breaking the key $1.20 level. However, traders in the Asia session lacked the momentum to keep driving the currency pair higher, forcing it to retreat back below the $1.20 level.

Euro surges to 27-month high, worrying the ECB

News from European Central Bank (ECB) member Philip Lane that the euro's level "does matter" for monetary policy caused traders to act more cautiously. With troubles plaguing the US dollar, the euro has become the favored currency of hedge funds with speculators holding record long positions in euro futures.

The ECB member's remark is the first time they have commented on the appreciation of its exchange rate. A high euro is a concern for the bank as it can weigh down the Eurozone economy being such a high exporting bloc.

However, amid a US Federal Reserve who have ruled out interest rate rises for a few years at least and the upcoming US presidential election, the euro could remain attractive for some time.

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