The euro fell to a four-session low against the dollar after data showing a drop in euro-zone inflation forced the European currency to give up much of its gains from earlier in the week. The European Union's Eurostat statistics agency said the annual rate of inflation in the 15 countries that use the euro fell to 2.1% in November from 3.2% in October. That was the largest decline in a month since euro-zone inflation records began in 1997. The inflation report hurt the euro because it means the European Central Bank will probably be less worried about inflationary pressures, and therefore more likely to cut interest rates this coming week in an effort to jump-start the region's economy. Lower ECB interest rates (the benchmark rate is 3.25%) would tend to reduce returns on euro-based assets, making the currency less appealing. "The market is no doubt looking for an ECB rate cut next week of at least [half a percentage point]after the 'flash' euro-zone CPI estimate collapsed," Stephen Malyon, senior currency strategist at Scotia Capital, said Friday. "We remain bearish toward the euro versus the dollar."
The euro fell to a four-session low against the dollar after data showing a drop in euro-zone inflation forced the European currency to give up much of its gains from earlier in the week.
The European Union's Eurostat statistics agency said the annual rate of inflation in the 15 countries that use the euro fell to 2.1% in November from 3.2% in October. That was the largest decline in a month since euro-zone inflation records began in 1997.
The inflation report hurt the euro because it means the European Central Bank will probably be less worried about inflationary pressures, and therefore more likely to cut interest rates this coming week in an effort to jump-start the region's economy. Lower ECB interest rates (the benchmark rate is 3.25%) would tend to reduce returns on euro-based assets, making the currency less appealing.
"The market is no doubt looking for an ECB rate cut next week of at least [half a percentage point]after the 'flash' euro-zone CPI estimate collapsed," Stephen Malyon, senior currency strategist at Scotia Capital, said Friday. "We remain bearish toward the euro versus the dollar."
Is it just market CW based on smoke and nonsense, are they over-exagerrating germany's issues or is there something else again causing this ? keep to the Fen Causeway
3) Everybody knows the ECB is about to bring interest rates down, and "markets are anticipating".
4) World stability hangs by a thread as economies continue to unravel - Telegraph
Investors are retreating into 3-month US Treasury bills - the ultimate safe-haven. The yield has fallen to 0.02pc, less than zero after costs. You pay Washington to guard your money.
(Read the whole article, go on)
5) Europe.Is.Doomed
It makes sense to me. Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
