Risk aversion is back in vogue today, and that is weighing on the euro today. Indeed, euro is a little lower ahead of tomorrow’s expected ECB policy announcement. Forex traders are waiting to see what the ECB will announce tomorrow.
The latest jobs data out of the United States, combined with the disappointing news out of China recently, are weighing on sentiment, as it appears that the global economy might be mired for longer still.
However, many are waiting to see what Mario Draghi announces tomorrow after the ECB‘s monthly policy meeting. Indications have been made that a rate cut and other loose policy measures might be adopted to further attempt to stimulate the eurozone economy. These measures, though, would weaken the euro further.
There is a bright spot in the form of Latvia’s desire to join the eurozone. If Latvia joins (and Olli Rehn thinks it’s a sign of the euro’s endurance), and no one leaves, it will bring the total number of countries in the eurozone up to 18.
Even with this news, though, the euro continues to struggle. There’s just too much uncertainty today.
At 14:41 GMT EUR/USD has dropped to 1.3077 from the open at 1.3081. EUR/GBP is down to 0.8507 from the open at 0.8543. EUR/JPY is down to 129.9955 from the open at 130.8750.
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