Euro Falls Further On Easing Speculation
The euro traded near a three-week low at $1.3746 on Friday morning at 6:55 GMT as speculation that the ECB was planning to ease further next week grew. The bloc's recent high unemployment figures coupled with the euro's recent strength has caused many central bankers to hint that the bank is willing and ready to act if need be.
This week several of the bloc's central bankers gave statements, which indicated that the eurozone could see a negative deposit rate or the implementation of an asset purchase program in April. Traditionally, the bank has been quite conservative about easing; and surprised investors in March when it decided to stay the course. However, dangerously low inflation has got the region's bankers worried and the bank will likely ease in some way at April's meeting.
Investors are anxiously awaiting German inflation data, due out later on Friday. As the bloc's largest economy, Germany typically posts the strongest economic data so the inflation figures will be a good indication of the best case scenario for the bloc. If the figures are low, speculation about an ECB policy move will gain more momentum and weigh the euro down further.
Meanwhile, many are looking to the eurozone's bailout countries for a good gauge of the region's recovery. Greece, one of the worst affected countries, has been through a series of bailouts since the financial crisis began. Now that the nation's aid is set to expire in January, many are wondering if Athens will require further funding.
Reuters reported that there has been no discussion of the need for further aid, and instead that the bloc is focusing on Greece's delayed loan payments and how to deliver them. Eurozone finance ministers are set to meet in Athens next Tuesday to discuss the country's financing needs, which will likely shed more light on what to expect next year when the country's aid runs out.
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