Eurozone GDP Expected To Disappoint
The euro began the week below $1.25 in the wake of last week's European Central Bank meeting. The common currency traded at $1.246 at 7:00 GMT as investors waited for the bloc’s GDP data, which is expected to show that the region is struggling to maintain its recovery.
On Thursday, the ECB maintained its current monetary policy at its monthly meeting, but ECB President Mario Draghi suggested that the bank is willing to expand its bond purchase program if need be. At the press conference following the meeting, Draghi remarked that the bank’s governing council was in agreement that if the region continues to struggle, the bank can do more to support the economy. Draghi also said that the bank was looking to expand its balance sheet towards the levels seen in 2012 at the height of the crisis.
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The meetings’ results put pressure on the euro, especially as the U.S. Federal Reserve has been moving in the opposite direction by ending its own quantitative easing program. This week is likely to ignite further concern within the currency bloc as GDP figures are due out. Reuters reported that analysts are expecting the report to show that the bloc grew 0.1 percent as a whole in the third quarter. The region’s largest economies, Germany and France, are expected to post growth of 0.1 percent and 0.2 percent, respectively, while Italy is forecast to have contracted.
With minimal growth in the eurozone’s economy, many expect that the ECB will be pushed to act in December. The bank has been reluctant to intervene any further after rolling out two stimulus packages in the past six months. Many believe the effects of those packages haven’t had time to materialize and be measured by economic reports.
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