Euro Tumbles Ahead Of ECB Meeting

The euro slumped even lower on Wednesday with just a day to go before the European Central Bank was set to meet and discuss the region’s monetary policies. The common currency traded at $1.2329 at 9:00 GMT as poor data from the region raised speculation that the ECB could decide to make a policy change at Thursday's meeting.

Data out on Wednesday showed that the region’s Purchasing Manager’s Index fell to a 16-month low in November, a telling sign for how the bloc will perform in the fourth quarter. According to CNBC, the bloc’s Markit PMI reading was 51.1, below estimates of 51.4 and a drop from October's 52.1 reading. Though the figure managed to make its way higher than the 50 reading that separates contraction from expansion, the steady decline in activity was troubling.

Related Link: Brent Makes Modest Gains In A Turbulent Market

The poor data came just a day before the ECB was set to determine whether or not more stimulus was needed  within the bloc. Though bank President Mario Draghi has been very vocal about the bank’s willingness and ability to ease further if need be, other members of the bank’s governing council have voiced their disapproval of more stimulus; namely Germany’s Jens Weidmann.

Weidmann has been openly criticizing the prospect of more stimulus in the past weeks, saying that without any major structural reforms, an injection of more cash would be useless. Additionally, some members of the governing council have said it is too soon to make a decision about more easing because the stimulus packages implemented over the summer have not had time to make a measurable effect on the bloc’s economy. Most expect that the bank will maintain its current position this month, but believe that more stimulus is on its way in the near future.