Euro Waiting On Data.

Today investors have been weighing the prospects of more monetary stimulus by the European Central Bank (ECB) and as a result, the Euro's volatility against the Dollar was close to its lowest in four months.

 

Earlier in the week, ECB President Mario Draghi had said that ECB policy makers had an "open mind" on a possible negative deposit rate.

 

He went on to say that "We will be looking at all the data that arrives from the Euro-area economy in the coming weeks and, if necessary, we are ready to act again." This followed a recent cut in the benchmark interest-rate to 0.5%.

This has seen the extra yield on 10-year Spanish debt over same-maturity bunds fall to 2.80 percentage points yesterday, the lowest in 21 months, while the 10-year yield spread for Italian and German securities dropped to its narrowest in 4 months to 256 basis points.

The Euro earlier gained a slight 0.1% to $1.0392 and remained little changed at 129.53 Yen.

It seems unlikely that the Euro will break out of its current range in the near term while more possible ECB action is on the cards.

Demand for the Euro has remained limited today, also ahead of data that is forecast to show that German industrial production had likely shrank by 0.1% in March following a 0.5% expansion in February.

News from China, the largest trading partner of both Australia and New Zealand, is that imports have risen more than expected by 16.8% in April, while exports grew 14.7% in the same month from March.