Between German inflation and policy divergence with the United States, the eurozone is struggling — and the 18-nation currency that represents it is losing ground. Indeed, the euro has slipped below 1.3400, falling to a level not seen since last November.
Euro is lower today as German inflation once again points to a softening economy. Many expect that Germany will lead the eurozone economy into slower growth, and there are even worries of another recession. Concerns over the economy of the 18-nation eurozone are also on the rise, thanks to the fact that more sanctions have been announced against Russia, and this could mean problems for the eurozone as well as Russia.
The situation in the eurozone stands in sharp contrast to the situation in the United States. Consumer confidence and consumer spending are on the rise in the United States, and many expect today’s Federal Reserve announcement to hint at when interest rates might head higher. This comes at a time when the ECB is under pressure to ease monetary policy. This policy divergence is keeping the euro down.
At 12:43 GMT EUR/USD is lower, dropping to 1.3379 from the open at 1.3409. EUR/GBP has managed to eke out a small gain, rising to 0.7915 from the open at 0.7914. EUR/JPY is also higher, up to 137.3495 from the open at 136.9265.
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