The euro weakened against the yen and slid to a one-month low against the U.S. dollar as the ECB policy makers are failing to reach a consensus to fight the growing recession in the bloc.
For the first time in a month, the euro crossed the 1.30$ resistance line and this slide could also be perceived against all major 16 currencies as contradiction deepens amid ECB policy makers. Lorenzo Bini Smaghi, an ECB board member, affirmed that the current Eurozone interest rate of 1.25% would be very close to the acceptable minimum limit, while 2 other council members said last week, that the rate could be brought to less than 1.0%. This confusion in Europe made the Dollar Index reach the highest level in a month, also helped by eventually favorable news in the U.S. economy.
The disagreement regarding the ECB policy will be a major issue for the currency this week as analysts indicate that confidence in the Eurozone currency has been deeply affected by the lack of objectiveness from the ECB council. The ECB interest rate has been falling consistently and has been cut since the beginning of the global slump, an attempt to ease the recession on the bloc.
The EUR/USD traded at 1.2958 from 1.3025 in Friday. The EUR/JPY fell to 127.88 from 129.45. Similar movements happened with the euro against all major currencies.
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