Euro Above $1.32 With Inflation Data To Come
The euro made its way above $1.32 on Thursday morning with inflation data due out on Friday.
The common currency traded at $1.3201 at 7:55 GTM as investors questioned whether the panic about next week’s ECB meeting was warranted.
Ever since European Central Bank President Mario Draghi spoke at the Jackson Hole Summit last weekend, investors have been hedging their bets for further easing at next week’s policy meeting.
Draghi confirmed that inflation expectations were lower and promised to address that issue at the September 4 meeting. According to The Wall Street Journal, however, German Finance Minister Wolfgang Schauble responded to the market’s speculation by saying the comments were “overinterpreted."
Some analysts are following suit and predicting that the ECB will wait until later in the autumn to make a move, but others still see the bank stepping in next week.
Inflation data due out on Friday will have a major impact on whether the ECB moves to ease further. While most expect that the inflation figures will fall, the bank will likely evaluate how close the region is to a period of deflation before making the decision to act.
Later on Thursday, Germany is set to release its inflation data, which will set the tone for Friday’s figures.
Also weighing on the euro is the ongoing conflict in Russia, where little progress was made during negotiations between Vladimir Putin and Petro Poroshenko.
Kiev remained firm in its accusations that Russia is sending troops across the border, creating further tension between the West and Moscow. With sanctions already in place, many believe that if the conflict is not resolved soon, the eurozone could see transactions with its main trading partner limited even further.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.