Euro is heading much lower today, dropping as the latest inflation reading prompts policymakers to talk about easing further at the next ECB meeting. Concerns about the economic recovery of the 19-nation currency region are once again paramount for many traders.
The inflation rate in the eurozone is at minus 0.2 per cent, which is lower than the forecast of 0 per cent. Tumbling prices in the 19-nation currency region are weighing on the euro as concerns about the economy rise again. There was a positive inflation reading of 0.3 per cent in January, so this change for February is starting to alarm policymakers, investors and Forex traders.
The European Central Bank will have a policy meeting March 9 and 10, and there is some speculation that policymakers, led by Mario Draghi, will decide on further easing measures. They have been talking about further easing for some months now, and the measures taken in December were lackluster. However, with this latest economic news, something more drastic might be in the works.
At 14:49 GMT EUR/USD is down to 1.0889 from the open at 1.0922. EUR/GBP is also lower, dropping to 0.7839 from the open at 0.7879. Losses to the sterling are limited by the Brexit fears. EUR/JPY is down to 122.9200 from the open at 124.4150.
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