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Euro Seen Dropping In Months To Come

Euro Seen Dropping In Months To Come

The euro was steady at $1.3392 at 8 a.m. GMT on Friday morning after sinking even lower on Thursday following the European Central Bank’s policy meeting. The meeting yielded little change for the region’s monetary policy or economic outlook, but President Mario Draghi’s press conference afterward shed some light on where the bank sees the common currency going in the future.

The Wall Street Journal reported that Draghi cited the diverging monetary policies of the U.S. Federal Reserve and the Bank of England, among other things, as factors likely to drive the euro lower in the coming months. He also warned that the tense situation with Russia was likely to weigh on the bloc’s economy if it continued along the same path.

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The EU has enacted strict sanctions against Russia following accusations that the nation was supporting Ukrainian rebels by sending arms across the border. The sanctions are designed to economically isolate Russia; but as one of the bloc’s largest trading partners, it will likely have a big impact on the eurozone’s economy as well.

While Draghi didn’t give any indication about whether or not the bank is planning to implement a quantitative easing program like that seen in the United States, most still believe the bank will be forced into easing further in the coming months. Data from the bloc has shown that inflation is continuing to drop and GDP figures have been disappointing. Now, with sanctions against Russia also weighing on the region’s recovery, the bank will have to consider further easing plans.


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