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Euro Remains Strong Amid Criticism

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Euro Remains Strong Amid Criticism

The euro began the week on a high note, holding onto its gains despite ECB efforts to talk the currency down.

The common currency traded at $1.3824 at 7:30 GMT on Monday as many worried that the strong currency coupled with the bloc's falling inflation could put a damper on the region's already fragile recovery.

On Thursday, French Economy Minister Arnaud Montebourg criticized the ECB's decision to maintain its current policies at its April meeting and called on the bank to ease further. The Wall Street Journal reported that Montebourg insinuated that the ECB was not helping the region's struggling governments with accommodative policy despite their efforts to reduce deficits through painful austerity cuts.

Also on Thursday, French Finance Minister Michel Sapin cautioned that the euro's current strength is weighing on France's sputtering economy. His complains echo many around the bloc, especially in southern, struggling nations.

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However, the common currency could continue to rise over the coming weeks as US data is expected to show that the nation's housing market is dragging. After an unusually cold winter, many brushed off poor data claiming that the cold and storms was to blame; but it doesn't look like home purchases rose along with temperatures.

New home sales data due out on Wednesday is expected to show no change, which could raise questions about the Fed's upcoming policy meeting. The bank is set to meet April 29-30 to discuss the region's monetary policy. While most expect that the bank will continue to taper its asset buying plan, the bank's forward guidance will be most sought after as investors try to pinpoint when the bank plans to raise its key interest rate.

 

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