Euro Presses Lower Ahead Of ECB Meeting
The euro sunk even lower on Wednesday as poor eurozone data made it even more clear that the Fed and the ECB are moving in opposite directions.
The common currency traded at $1.2620 at 4:00 GMT as investors wondered how the European Central Bank would react to the eurozone’s falling inflation.
A report out on Tuesday showed that eurozone inflation slid in September, a sign that the ECB’s tactics so far haven’t been effective. Consumer prices increased by just 0.3 percent annually in September, a small decline from August’s 0.4 percent rise.
The figure is in what the ECB has termed “the danger zone," below 1 percent, and falls far below the bank’s 2 percent target.
Reuters reported that the inflation data has many speculating that the ECB will introduce new stimulus measures at Thursday’s meeting. The bank has already lowered the region’s interest rates to record lows and tried to spur on lending by offering low-cost loans to eurozone banks.
However, none of these efforts seem to have been effective in turning around the region’s sagging economy.
In the past, bank President Mario Draghi has said that the bank will do whatever it takes to keep the eurozone afloat and claimed that the ECB still has more tools in its war chest.
Some think the bank will roll out a quantitative easing program like that seen in the U.S., but German officials have been very vocal about their disapproval of such a measure without further reform in struggling eurozone economies.
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