The euro continues to struggle a bit today as concerns about what’s next for eurozone monetary policy grow. There is speculation that the ECB will have to ease policy further in order to stimulate the eurozone economy, and that has some worried about what could be next.
Even though wage growth in the eurozone outpaced consumer prices in the fourth quarter of 2013, the reality is that the eurozone is still lagging behind in economic growth. Wage growth is likely to be welcome news to analysts and policymakers, but it doesn’t change the fact that inflation is still well below target, and the ECB might have to ease policy a bit to boost the economy.
While the wage growth is a positive sign, it’s still not quite enough. Unemployment is still an issue in the eurozone, and the Southern European economies are still struggling quite a bit in relation to Northern European economies. The growing gap between German economic recovery and what’s happening on the periphery continues to be one of the issues affecting the ECB‘s balancing act.
At 13:29 GMT EUR/USD is a little bit lower, dropping to 1.3917 from the open at 1.3933. EUR/GBP is also lower, down to 0.8368 from the open at 0.8397. EUR/JPY is down to 141.3400 from the open at 141.3510.
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