Even though the European Central Bank kept rates on hold for now, there are still concerns about the future. With the eurozone economy moving sluggishly, and the sovereign debt saga far from over, there are worries that the ECB will have no choice but to cut rates in the future.
The euro is slightly lower against the US dollar right now, but it isn’t showing much reaction overall. For the most part, the 17-nation currency is flat as Forex traders try to gauge what is coming next. The ECB kept rates steady in its announcement today, but there is speculation that Mario Draghi could hint at future rate cuts.
Eurozone is still in recession, but the euro’s losses are limited from that result as trade, particularly trading gains by Germany, help ease some of the sting. There are still worries about the sovereign debt problem. Even though the latest hurdle was cleared for Greece, there is still the chance that the country will throw up more stumbling blocks. And now, focus is returning to Spain after a disappointing bond auction earlier this week.
At 13:59 GMT EUR/USD is down to 1.3034 from the open at 1.3068. EUR/GBP is down to 0.8094 from the open at 0.8117. EUR/JPY is down to 107.2900 from the open at 107.7550.
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