Market Overview

Following Poor Eurozone Data, Euro Drops To 14-Month Low

Following Poor Eurozone Data, Euro Drops To 14-Month Low
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The euro fell to a 14-month low on Thursday morning following poor data out of the eurozone and more promises from European Central Bank President Mario Draghi.

The common currency traded at $1.2735 at 7:20 GMT while the dollar continued to climb as Fed and ECB policies continued to diverge.

American housing data showed that home purchases in the U.S. rose to a six-year high in August, suggesting that the housing market was moving back on track after much speculation that the sector could hold back the U.S.’ economic recovery.

European data painted a different picture with Germany’s Ifo business sentiment survey turning in disappointing results. The figures showed that corporations’ outlooks were at their lowest level in more than a year, a product of uncertainty about the bloc’s future.

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Despite months of lackluster data, ECB President Mario Draghi was upbeat about the bloc’s progress in the second part of the year in an interview with a Lithuanian publication out on Thursday.

Reuters reported that in the interview, Draghi promised that the bank was ready to do more if necessary, but said that the stimulus announced earlier this summer is expected to help boost the region’s growth modestly in the second half of the year.

Draghi acknowledged that the geopolitical climate right now could be weighing on business confidence figures, but that the sanctions war with Russia has had a limited effect on the eurozone economy.

His remarks could explain some of the negativity in the German figures, as many are still worried about the ongoing situation in Ukraine and how that will impact the bloc in the future.

Posted-In: European Central BankNews Eurozone Forex Global Federal Reserve Pre-Market Outlook Markets Best of Benzinga


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