Euro: reasons behind the decline
So, EUR/USD began 2014 with eroding the 6-month uptrend support line. Euro zone’s money market conditions are tightening.
Eonia, the euro zone overnight interbank lending rate, rose above 0.30% on Friday exceeding the ECB’s 0.25% benchmark rate. The regulator’s president Mario Draghi said this month that an “unwarranted” rise in interbank lending rates that underpin euro zone borrowing costs would be one of the triggers for another rate cut or more drastic action.
As a result, EUR/USD declined on the expectations that the ECB night act to ease the money market conditions.