Euro Economic Data Could Prompt More ECB Action

Even though the euro is holding some of its recent gains today, there are expectations that could change if the ECB has to take more action to try to stimulate the eurozone economy. The latest economic data isn’t all that encouraging, and the ECB might be under pressure to do more.

The latest economic data out of the ECB is somewhat disappointing. Business activity in the eurozone expanded at a slower rate than expected, dropping to 52.3 from 52.5. While that’s still in expansion territory, the disappointment comes from the fact that the expansion is slowing.
Earlier this month, the ECB cut its rate again, as well as announced it will be participating in quantitative easing by purchasing assets. The idea is to try to stimulate the economy. Previous efforts don’t seem to be working, but the ECB might wait to see if the latest round of actions help make a difference.
For now, though, the news hasn’t dented the euro’s current performance too much. The 18-nation currency is still holding its own, logging gains against some of its major counterparts today.
At 10:34 GMT EUR/USD is up to 1.2884 from the open at 1.2850. EUR/GBP is up to 1.6383 from the open at 1.6361. EUR/JPY is down to 139.6850 from the open at 139.8500.

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