Euro has been doing reasonably well recently, thanks to a bit of risk-on trading and some optimism. Now, though, the brakes have been applied. Euro is losing ground as comments from an ECB board member indicates that another rate cut could be on the way.
ECB Governing Council member Ardo Hansson made comments about interest rates, and said that the ECB is considering the possibility of negative deposit rates. This news has thrown many Forex traders for a loop, and is resulting in a lower euro.
Concern has been raised that the eurozone could slip back into recession, just after moving out of its recent economic fund. With concerns about slowing in Germany and France, and worries about what could be next for the eurozone, some are looking for a weaker euro to stimulate the economy. Another ECB rate cut might just what’s needed.
The euro is moving lower as a result, but the losses are limited. Many are waiting for preliminary November inflation data. It will be released later this week, and likely influence what happens at the next ECB meeting.
At 15:26 GMT EUR/USD is down to 1.3499 from the open at 1.3551. EUR/GBP is holding steady at its open of 0.8350. EUR/JPY has moved a little higher to 137.2570 from the open at 137.2430.
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