This morning the Euro was able to rebound from yesterday’s lows as a governing member of the ECB council soothed fears inspired by Mario Draghi’s policy statement.
Yesterday Draghi intimated that the European Central Bank could consider cutting the deposit rate below zero, and the Euro tumbled by the most for over two-weeks against the US Dollar as a result.
The Euro Exchange Rate was in the region of 1.3121 against the US Dollar as of 11:10 am GMT
However, after ECB council member Ewald Nowotny stated that the central bank has ‘no plan in this direction’ at present the Euro was able to recoup losses.
After the news the Euro was able to strengthen to 1.3130 against the US Dollar, and the common currency was little changed after the European Union cut its growth forecast for the Eurozone.
With unemployment in the Eurozone now at a record high of 12.1 per cent and the 17 nation currency bloc’s recession deepening, the EU has slashed its growth projections.
In February the EU forecast that Eurozone GDP would shrink by 0.3 per cent in 2013, but with seven economies in the currency bloc expected to contract this year (including France, Spain, Italy and Greece) this figure has now been revised to a drop of 0.4 per cent.
Last year the Eurozone’s economy contracted by 0.6 per cent.
Germany, the largest economy in the Eurozone, also had its growth forecast cut from 0.5 per cent expansion to 0.4 per cent.
Olli Rehn, the EU’s Economic and Monetary Affairs Commissioner, stated: ‘In view of the protracted recession we must do whatever it takes to overcome the unemployment crisis in Europe.’
Meanwhile, Marco Buti (head of the commission’s economic department, noted: ‘High unemployment points to the need for continuing the course in structural reforms. The reduction in fiscal deficits is making headway in a differentiated way [but] intolerably high unemployment in vulnerable member states gives cause for a great concern.’
And with the ECB all but out of conventional measures, something significant may have to occur if policy makers are to prevent unemployment extending above the expected level of 12.2 per cent this year.
The upcoming US non-farm payrolls data could trigger additional Euro movement. The report is scheduled for release at 13:30 GMT.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3121 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8440 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.2802 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.5390 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7620 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1850 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7811 >
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6507 >
(Correct as if 11:07 GMT)
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