The Euro rose against a number of peers on Monday following the release of data which showed that inflation in the Eurozone was it’s at lowest level since 2009, prompting speculation to rise that the European Central Bank will announce monetary easing measures at Thursday’s policy meeting.
Pressure is building on the European Central Bank to take more action to aid the region’s struggling economic recovery. With unemployment remaining close to record highs of 12%, a shrinking bank balance and the threat of deflation economists are calling for the bank to take radical action.
According to Eurostat, annual consumer inflation in the Eurozone came in at 0.5% in March, the pace of rising inflation eased from the 0.7% figure recorded in February. Economists had been expecting a figure of 0.6%, a figure that was already causing concern.
Today’s figure is the sixth consecutive month that Eurozone inflation has been in the ECB’s danger zone of below 1%.
After the data was released the Euro dropped steeply against the Pound and US Dollar but quickly regained ground as investors raised their bets for intervention by the ECB. The Bank’s President Mario Draghi recently said that the Bank was ready to intervene if inflation slipped lower than it expected, easing some concerns.
Earlier in the session the Euro found support from positive data releases out of Germany and France. In the region’s largest economy retails sales smashed economist forecasts and French GDP came in above forecasts.
The Euro is expected to experience volatility throughout the week due to the release of a number of key data reports. Tomorrow sees the regions latest unemployment rate and manufacturing data. Negative results from those are sure to see bets rise that the ECB will take action in Thursday’s policy meeting.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3773 ,
Euro,,British Pound,0.8281 ,
Euro,,Australian Dollar,1.4925 ,
Euro,,Canadian Dollar,1.5221 ,
[/table]
