Euro Steady As ECB Meeting Approaches
The euro was steady above $1.25 after a roller coaster day on Tuesday, which ended on a high. The common currency traded at $1.2551 at 7:00 GMT after news that the European Central Bank's governing council was at odds over the direction of policy.
Early in the day on Tuesday, the euro was weighed down by the European Commission’s decision to downgrade its forecast for the bloc’s economic progress over the next three years. The commission revised down its GDP estimates through 2016 and predicted that the region would struggle with inflation far below the ECB’s 2-percent target for longer than expected.
However, the euro got a boost after Reuters reported that there could be some tension at this week’s ECB meeting. The monthly policy meeting, set to take place on Thursday, may set the stage for contention between ECB President Mario Draghi and some of the other central bankers. According to the report, Draghi is looking to announce a target figure for the bank’s asset buying scheme, something the bank originally said it wouldn’t do.
Regardless, investors will be keeping a close eye on the bank this week as its monthly meeting draws nearer. Most analysts are not expecting the bank to make any policy changes this month as the bank will likely wait to see how its previous rate cuts and stimulus measures manifest in the region’s economy. Still, the bank is under a lot of pressure to ease further as the bloc’s largest economies post lackluster data and expectations for growth within the region dwindle.
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