Euro Weakness Increases on Expectation of Easing in June

Euro weakness is increasing, with the 18-nation currency losing ground to most of its major counterparts today. Expectations that easing will go forward in June are weighing on the euro.

The next ECB meeting isn’t until June 5, and many analysts expect that euro weakness will continue from now until then. Expectations that there will be easing are on the rise, especially after recent comments from policymakers.
ECB President Mario Draghi indicated that policymakers at the central bank are considering the idea of some type of easing at their June 5 meeting. With inflation practically non-existent, and economic growth barely into positive territory, eurozone leaders are concerned about what’s next. A strong euro is hampering economic recovery in the 18-nation currency region, so weakness is being prescribed.
There is still room to reduce interest rates for the euro, and Draghi has said in the past that other strategies, such as asset purchase programs or negative deposit rates, are also possibilities if nothing seems to work. So far, though, just talking about easing has done a great deal to reduce euro strength.
At 13:33 GMT EUR/USD is lower, dropping to 1.3699 from the open at 1.3709. EUR/GBP is also lower, down to 0.8135 from the open at 0.8156. EUR/JPY is down to 138.8185 from the open at 139.1450.

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