Asian session review: the dollar continued to rise against the euro

During today's Asian trading, the US dollar continued to rise against the euro on signals of concern from the European Central Bank (ECB) about the significant strengthening of the european currency recently.

Earlier this week, the euro rose above the $1.2 mark for the first time since May 2018. Following this, the exchange rate quickly moved to a decline, which experts explain by the statement of the ECB's chief economist Philip Lane that the exchange rate "matters" in monetary policy.

Despite the fact that inflation in the euro zone remains extremely low, Lane's words were taken as a signal that the ECB considers excessive growth in the value of the euro in recent years. The strengthening of the currency eases inflationary pressure, as it reduces the cost of imports.

Usually, ECB representatives do not mention exchange rates, except in the context of the fact that this factor is one of several that the Central Bank evaluates when making decisions about further monetary policy.

"At the moment, regulators can do little to control exchange rates, but if the signals coming from the ECB have an effect, the euro may head towards the $1.17 mark, as traders will prefer to lock in profits after the recent rally," said experts at BK Asset Management.

The ICE index, which tracks the dynamics of the US dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose by 0.22%.

CBA experts note that the US dollar is likely to return to a decline in the near future due to expectations of the imminent appearance of a coronavirus vaccine in US that support interest in risky assets.