The euro touched a new low for the year versus the US dollar today as traders are anticipating additional monetary easing from the European Central Bank. Worsening German consumer sentiment was not helping matters. While the shared 18-nation currency bounced against the greenback and was flat versus the Japanese yen most market analysts expect the weakness to persist in the future.
The GfK German Consumer Climate unexpectedly slipped from 8.9 to 8.6 in August. The report commented on the result:
The escalation of the situation in Iraq, Israel and Eastern Ukraine as well as the gradually accelerating spiral of sanctions in Russia have now also had a negative impact on the previously extremely optimistic economic outlook of Germans.
The euro also fell as traders considered last week’s comments of ECB President Mario Draghi as a sure sign of upcoming stimulating measures. Yet Germany’s Finance Minister Wolfgang Schaeuble said that the comments were “over-interpreted”, and this perhaps explains the current bounce of the currency.
EUR/USD rose from 1.3167 to 1.3184 as of 11:44 GMT today following the drop to 1.3152. EUR/JPY traded near the opening level of 137.01.
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