Euro Buoyed By German Data
The euro steadied on Tuesday after data out Monday gave it a modest boost. The common currency traded at $1.2433 at 6:30 GMT as German data and remarks from the country’s Bundesbank President supported prices.
On Monday, Bundesbank President Jens Weidmann made comments that have called into question whether or not the European Central Bank will be able to begin a large scale easing program in the coming months. The Wall Street Journal reported that Weidmann said in Madrid that he was skeptical that a quantitative easing program would do any good without the proper reforms.
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Not only did he question the effectiveness of quantitative easing, but he also expressed concern about the legal troubles the ECB would have trying to roll out such a program. Weidmann cautioned that there would be numerous legal difficulties attached to the process of printing new money in order to buy government bonds.
His remarks gave investors reason to question ECB President Mari Draghi’s comments last Friday, which strongly supported more easing and suggested a quantitative easing program could be on its way as early as December.
Meanwhile, data from the bloc was also in support of the euro on Monday as Germany’s Ifo business sentiment survey showed an unexpected improvement. The reported showed that business confidence in the bloc’s largest economy increased to 104.7 in November from 103.2 in October, the first rise in six months. The figure was encouraging as forecasts had markets expecting a 103 reading, but the improvement in confidence suggests that Germany may be able to turn itself around after a difficult year.
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