Euro Drops on Policy Expectations

Euro is lower today, dropping as Forex traders look ahead to policy expectations from Mario Draghi and the European Central Bank. Many expect the ECB to embark on looser monetary policy, and that is weighing on the euro.

While the ECB might be quite ready to announce measures that would lead to a looser monetary policy, many expect things to head that direction quite soon. Indeed, even if Mario Draghi and other policymakers don’t implement further easing this month, many expect a better-fleshed-out plan about how and when easing is likely.
The result of this latest expectation is a weaker euro. The 18-nation currency has be struggling recently, and today the euro is down against most of its major counterparts. It’s not very surprising, given the expectations for policy divergence between the ECB and the Federal Reserve, which is expected to start tightening soon.
Also weighing on the euro are concerns about the situation in the periphery. Although some countries, like Spain, appear to be moving forward, there are still some issues and some holdover from the recent crisis.
At 10:27 GMT EUR/USD is down to 1.3140 from the open at 1.3150. EUR/GBP is down to 0.7984 from the open at 0.7989. EUR/JPY ha actually moved higher, up to 137.8300 from the open at 137.8030.

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