Euro (EUR) Exchange Rate Looks Ominous as Debate Shrouds Eurozone Recovery
The Euro (EUR) exchange rate is currently trending at 1.3532 against the US Dollar (USD), up by 0.06% so far this session.
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Alternatively the Single Currency is also up trading at 0.7906 against the British Pound (GBP), with a market movement of 0.20%
However, economists are speculating on Thursday that the Eurozone is in trouble, after Bloomberg released their Global Poll showing investors fear that the European Central Bank isn’t aiding Eurozone recovery as much as it could.
Vice President at Banco Bilbao Vizcaya Argentaria SA based in Madrid, Cyril Blaise, commented: ‘The Eurozone economy is deteriorating. European banks have no more interest in deleveraging.’
However after President for the ECB, Mario Draghi, introduced new, somewhat unorthodox, monetary policy measures in June, there is speculation circulating that these new measures are restrictive.
An expert in the field, Mike Jensen, stated: ‘I am sceptical that monetary authorities recognize the issues fully and that policy will continue to lag events.’
Meanwhile as the Euro is performing poorly against other majors, Thursday has seen the Japanese Yen (JPY) reach five month highs against the Single Currency.
Meanwhile the Pound has recently attained its most favourable exchange rate against the Euro in 22 months.
With fears of recent Eurozone data performing below standard however, the Eurozone may see more disappointment by way of data today if the figures can’t reach economists forecasts.
Tokyo based currency expert for the Societe Generale, Kyosuke Suzuki, stated: ‘Recent German economic data is not that strong and some ECB policymakers are showing concerns on the threat of deflation.
The difference in monetary policy stance (between the ECB and other major central banks) is hurting the Euro.’
However concerns over the Eurozone’s recovery seems to be expanding amongst economists.
Barclays have also commented: ‘We believe circumstances are fast increasing the risks that the ECB will be forced to launch further unconventional measures. What, when and how are less certain, but there are strong hints that a weaker Euro may be the only channel to reflate the economy.’
Thursday will prove to be significant for the Euro as the Eurozone releases Consumer Price Index data which will show inflation rates currently predicted to reach 0.8%.
As speculation increases as to the fate of the Eurozone recovery, the Euro should expect a bumpy ride against its other major currency peers.