Euro Drops as Germany and the ECB Disagree

The euro’s struggles against the US dollar continue today, with Germany and the ECB disagreeing on the next policy move. Euro has managed to make up some lost ground, though, paring its earlier losses as risk appetite rises on better equity performances. However, with commodities lower, the euro isn’t likely to find too much support.

Right now, some major disagreements over policy for the eurozone are emerging between Germany and the European Central Bank. The ECB is prepared to take more steps to ease the monetary policy, while Germany, led by Chancellor Angela Merkel, has expressed concern over the continued stimulus measures. Germany is ready to see tighter monetary policy in the eurozone.
Normally, Germany’s opinion carries a great deal of weight. As the largest economy in the eurozone, and a leader in politics and economics, Germany matters. However, the ECB feels strongly about this, and that is leading the body to go it alone if need be.
Also not helping the situation for the euro is the lower commodities prices. Gold and oil are both lower, and not able to provide support to the ailing euro.
At 14:09 GMT EUR/USD is down to 1.2973 from the open at 1.2975, and off the session low of 1.2946. EUR/GBP is up to 0.8504 from the open at 0.8480. EUR/JPY is down to 132.0155 from the open at 132.1250.

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