Euro Heads Lower on Policy, Business Confidence

Euro is down nearly across the board today, dropping as policy measures indicate weakness ahead, and as business confidence in the 18-nation currency region falters. With policy divergence from the United States and other major economies, and concerns about the future, it is little surprise that the euro is struggling today.

Last Thursday, the European Central Bank‘s policymakers revealed their plan for keeping the eurozone from slipping back into recession. While there isn’t a plan for an asset purchase program right now, the other measures are designed to help stimulate the economy and boost inflation to a certain degree. This necessitates euro weakness, and that weakness is on display today.
There is speculation that the ECB’s current efforts won’t be enough, however. A data reading of investor confidence in the eurozone showed a decline. It appears that investors aren’t sure that enough will be done to kickstart better growth. However, the Whit Monday holiday in some parts of the eurozone are slowing trade in general, even though Forex dealers don’t take holidays.
For now, euro is likely to remain weak, while other currencies strengthen on the prospect of improving economies.
At 14:40 GMT EUR/USD is down to 1.5393 from the open at 1.3643. EUR/GBP is down to 0.8096 from the open at 0.8119. EUR/JPY is down to 139.3990 from the open at 139.8750.

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