The euro was mostly flat today as markets turned their attention away from politics towards the next week’s European Central Bank policy meeting and economic data that may influence the ECB decision.
In what looked like a clever ploy, Spanish Prime Minister Mariano Rajoy demanded from the Catalan leader Carles Puigdemont to make a clear statement whether Catalonia has announced independence. A clear yes would allow Rajoy to trigger Article 155, suspending the region’s autonomy and allowing direct control from Madrid, while a clear no would likely unravel the separatist movement. Yet Puigdemont refused to play according to Rajoy’s rules, making a very unclear response.
But as with the Great Britain pound, the euro is more likely to be affected by macroeconomic reports and resulting monetary policy outlook than by politics. Like Britain, the eurozone will release its inflation data tomorrow. But unlike the Bank of England, the ECB will hold its policy meeting as soon as the next week, meaning that the Consumer Price Index will be among the last (and arguable the most important one) economic reports that will be able to affect the central bank’s decision.
EUR/USD traded near its opening level of 1.1810 as of 13:14 GMT today. EUR/JPY was also near the opening of 132.00. EUR/CHF traded at about 1.1516 after starting trading at 1.1523 and falling to the daily low of 1.1488.
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