The Euro dropped from the 3-week high achieved last week but losses were at a minimum as most investors expect the European Central Bank (ECB) to embark on a fresh new campaign to tackle the Euro Zone debt crisis.
Strangely enough, investors have avoided both the US Dollar and the Japanese Yen over the last few days, leaving the greenback stuck at a 3-week low against a basket of currencies.
The focus of market players in the days ahead, will be largely on whether the ECB will reactivate its bond buying programme in an attempt to cut Spanish and Italian borrowing costs. The ECB's President, Mario Draghi, had vowed recently to do whatever was necessary to protect the Euro zone from collapse.
I think it's likely that the Euro's downside tendency will be limited in the coming days and that the currency will probably remain range bound, at least until the ECB meeting on Thursday.
In the opinion of many analysts, ECB bond buying alone will not resolve the fiscal issues of indebted countries and is therefore unlikely to change the Euro's weak overall trend.
If nothing meaningful is announced, that would clearly be a massive disappointment, though the expectation is that there is room for some leeway to be made.
A report due out today, from the European Commission in Brussels, may add to signs that the region's debt crisis is weighing on consumer sentiment.
The report is expected to confirm its index of household sentiment in the Euro area declined to an almost three year low of minus 21.6 in July.
A separate report, due out on Tuesday, could show that the jobless rate in the area probably had risen to 11.2% in June, from an all time high of 11.1% in May.
With economic data remaining very weak, the Euro will continue to be sold each time such data comes out.
The Euro earlier dropped 0.3% from a three week high of $1.2390 hit on Friday, to $1.2293 and fell 0.4% to 96.31 Yen, remaining above last week's low of 94.12 Yen.
Ahead of a two day meeting of the Federal Reserve, which starts on Tuesday, demand for the Dollar was limited amid speculation the Fed may signal additional stimulus which would debase the greenback.
Fed Chairman, Ben Bernanke, had said earlier this month that policy makers are looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labour market. Bernanke had indicated that introducing a third round of asset purchases is an option.
Strangely enough, investors have avoided both the US Dollar and the Japanese Yen over the last few days, leaving the greenback stuck at a 3-week low against a basket of currencies.
The focus of market players in the days ahead, will be largely on whether the ECB will reactivate its bond buying programme in an attempt to cut Spanish and Italian borrowing costs. The ECB's President, Mario Draghi, had vowed recently to do whatever was necessary to protect the Euro zone from collapse.
I think it's likely that the Euro's downside tendency will be limited in the coming days and that the currency will probably remain range bound, at least until the ECB meeting on Thursday.
In the opinion of many analysts, ECB bond buying alone will not resolve the fiscal issues of indebted countries and is therefore unlikely to change the Euro's weak overall trend.
If nothing meaningful is announced, that would clearly be a massive disappointment, though the expectation is that there is room for some leeway to be made.
A report due out today, from the European Commission in Brussels, may add to signs that the region's debt crisis is weighing on consumer sentiment.
The report is expected to confirm its index of household sentiment in the Euro area declined to an almost three year low of minus 21.6 in July.
A separate report, due out on Tuesday, could show that the jobless rate in the area probably had risen to 11.2% in June, from an all time high of 11.1% in May.
With economic data remaining very weak, the Euro will continue to be sold each time such data comes out.
The Euro earlier dropped 0.3% from a three week high of $1.2390 hit on Friday, to $1.2293 and fell 0.4% to 96.31 Yen, remaining above last week's low of 94.12 Yen.
Ahead of a two day meeting of the Federal Reserve, which starts on Tuesday, demand for the Dollar was limited amid speculation the Fed may signal additional stimulus which would debase the greenback.
Fed Chairman, Ben Bernanke, had said earlier this month that policy makers are looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labour market. Bernanke had indicated that introducing a third round of asset purchases is an option.
Posts
No comments:
Post a Comment