Market Overview

ECB Eyes Falling Inflation With Concern

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The euro regained some of its strength over the weekend after US non-farm payrolls data came in lower than expected and disappointed investors.

The common currency traded at $1.3701 at 6:00 GMT on Monday morning, ahead of the US Federal Reserve's meeting minutes.

Later in the week, the Fed is set to release a transcript of its March 18-19 meeting at which it elected to continue tapering its bond buying program and reduced asset purchases by another $10 billion.

Following the meeting, Fed Chair Janet Yellen remarked that the bank could raise its key interest rate six months after the taper was complete. The comment began to stir worries among investors who weren't expecting the bank to give up its accommodative policies so soon.

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Now, most are eager to see the bank's meeting transcript for a chance to gain insight into its future course. If the minutes show that Yellen's remarks are an accurate representation of the nation's central bankers' view, the dollar will likely extend its gains on the euro.

The euro has also been under pressure recently as the bloc struggles with falling inflation amid a tepid recovery. Last week, the region's central bank decided not to step in with monetary policy changes just yet despite calls from the International Monetary Fund to act.

However, European Central Bank members admitted over the weekend that they were worried about the region's declining inflation figures. In an interview with CNBC, ECB Vice President Vitor Constancio said that he and his colleagues are quite concerned about the bloc's most recent reading of 0.5 percent, and that a figure below one percent for such a long period of time is troubling.

He also remarked that the bank is hoping that the latest figure is the region's inflation bottoming out, and that the ECB is still forecasting inflation of one percent over the course of the year.

Posted-In: News Eurozone Commodities Forex Global Federal Reserve Pre-Market Outlook Markets Best of Benzinga

 

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