Euro to US Dollar (EUR/USD) Exchange Rate Struggling on Prospect of Growth Slowing
Paris-France (Nov 11) In a light news day for Europe the Euro was holding onto last week’s losses against the US Dollar as the local session began. Friday’s stronger-than-forecast US non-farm payrolls report allowed the ‘Greenback’ to advance on several of its most traded peers and the Euro, still reeling from the European Central Bank’s surprise rate cut, buckled under the pressure.
The common currency also largely retained declines against the Pound as economists looked ahead to this week’s Eurozone data.
Industry experts are expecting this week’s growth report for the 17-nation currency bloc to show that expansion slowed. If the data confirms that the region’s economy grew just 0.1 per cent in the third quarter, it will support the case for ECB President Mario Draghi keeping policy accommodative and perhaps herald a further rate cut in the future.
Separate reports are also expected to reveal that growth slowed in the Eurozone’s largest economies, France and Germany, with German expansion falling to 0.3 per cent – less than half the growth recorded in the second quarter. Italy, meanwhile is expected to post a ninth quarter of contraction, although data has already shown that Spain emerged from recession in the third quarter of the year.
The Euro is currently trading against the US Dollar in the region of 1.3364
According to economist Ben May; ‘Further ECB policy support is needed to support the economy. [But] even if the ECB does loosen monetary policy in the next month or two, it is unlikely to resolve the fundamental economic problems that the Eurozone still faces.’