The inflation reading turned negative today, sending the euro lower as speculation about the measures the European Central Bank will have to take in order to continue stimulating the economy. The latest German unemployment figures aren’t helping the situation, either.
Consumer prices in the eurozone declined 0.1 per cent year over year for the month of September. This drop in inflation was unexpected, and it has many concerned about what’s next for the eurozone. ECB President Mario Draghi has already said that he is willing to step up stimulus efforts if warranted, and it appears that policymakers might be justified in expanding the current quantitative easing program.
Also impacting the euro’s performance today is the fact that the jobless remains unchanged at 11 per cent throughout the euro zone. While a steady employment picture isn’t terrible news, there are concerns about German unemployment, which rose by 2,000 in September when many analysts had expected a 5,000 decline. The news bodes ill for Germany’s economy, which is the largest in the eurozone, and the place everyone looks for economic leadership.
At 14:11 GMT EUR/USD is lower, dropping to 1.1182 from the open at 1.1249. EUR/GBP is down to 0.7371 from the open at 0.7425. EUR/JPY is dropping to 134.2680 from the open at 134.7100.
If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.
