The euro declined against the U.S. dollar and the Japanese yen today after opening with a rather large negative weekly gap against these currencies as the traders expect that ECB will continue rate reduction this week.
The European currency fell to the one-month lowest against they yen and the weakest level since January 6 against the dollar. The currency analysts and Forex traders expect that the European Central Bank will cut its main interest rate to the lowest level since 2005 on its next meeting this Thursday — January 15. The todays decline in the Asian stock markets also helped the yen to grow against the euro as the investors ran away from the carry trade.
Apart from the ECB rate decision, this week will feature some important macroeconomic reports from the world-leading economies. Analysts expect these reports to show the further worsening of the overall situation that will spur the risk-aversion and inevitably push the yen and the dollar up against the euro. If the ECBs cut will exceed 50 basis points, euro may fall significantly faster than the markets are showing currently.
EUR/USD fell from 1.3459 to 1.3361 as of 9:54 GMT today. EUR/JPY declined from 121.12 to 120.43 — the lowest level since December 12.
If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.
Be First to Comment