Eurozone Data Promising Despite ECB Warnings
The euro lost some ground against the dollar on Friday after positive US data coupled with more warnings from the European Central Bank weighed on its strength.
The common currency traded at $1.3836 at 7:40 GMT as the possibility of further easing in the eurozone began to look more promising.
On Thursday, the dollar gained momentum after durable goods data came in higher than expected.
US durable goods orders in March increased by 2.6 percent, above the two percent gain which was expected.
Also keeping the euro under pressure was a speech from the ECB’s Mario Draghi, in which he confirmed that the bank was considering more easing in light of the euro’s strength.
Draghi said the bank may use a broad based asset purchase program or another unconventional tool in order to keep the euro from pushing inflation lower.
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Eurozone inflation has remained a major concern for the bank as the region’s inflation data has shown a gradual decrease.
Last month, eurozone inflation was dangerously close to zero at 0.5 percent, but the bank chose to wait it out, saying that the figure could be due to seasonal factors. The number was far below the ECB’s two percent target and sparked calls from the International Monetary Fund for the bank to ease.
Despite issues with the euro and inflation, the bloc’s recovery seems to be on track as data across the region has signaled growth.
The Wall Street Journal reported that Spain’s central bank announced on Thursday that the nation’s growth rate likely accelerated in the first quarter. Also promising was Germany’s Ifo business climate indicator, which showed improved sentiment at the start of the second quarter.
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