As the debate over the legality of the European Central Bank’s Outright Monetary Transaction Scheme rumbles on in the German constitutional court, German Chancellor Angela Merkel has expressed her support of the measure, even as Bundesbank chief Jens Weidman makes his opposition clear.
The Euro Exchange Rate was in the region of 1.3328 against the US Dollar as of 11:00 GMT
With Jens Weidman and executive ECB board member Jorg Asmussen trading blows, Merkel stated that she is confident that the central bank is ‘doing what is necessary to safeguard monetary stability.’
The debate is set to drag on until the Autumn, with many industry experts expecting the outcome of the case to be announced after the German general elections.
Euro trading in region of 3 ½ month high
In other Eurozone news, the ECB published its monthly report this morning. The central bank opted to hold the key rate and intimated that it expects price pressures to remain subdued.
The report asserted that: ‘The Governing Council continues to see downside risks surrounding the economic outlook for the Euro area. They include the possibility of weaker than expected domestic and global demand and slow or insufficient implementation of structural reforms in Eurozone nations.’
The ECB’s current growth predictions for the currency bloc stand at contraction of 0.6 per cent in 2013 and expansion of 1.1 per cent in 2014.
The Euro continues to trade in the region of the 3 ½ month high achieved against its US counterpart yesterday and has strengthened against the Pound in response to concerns that the British currency’s recent rally has been overdone.
When asked for her opinion of why the Euro has exhibited such strength this week, currency strategist Jane Foley replied: ‘The bigger surprise is the strong standing of the EUR and the fact that the USD is one of the poorer performing currencies over the past month. We attribute much of the USD’s lacklustre performance in recent weeks to positioning. Earlier this year the market built long USD positions on the back of good Q1 US economic data. Q2 US economic data is softer and this appears to be limiting investor’s desire to lengthen USD positions despite the greenback safe haven status’
This week has been relatively quiet in terms of influential news from the US and Eurozone.
However, the EUR/USD pairing is likely to experience movement in the hours ahead as US advance retail sales figures are released.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3328 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8517 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4064 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6807 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7493 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1742 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7113 >
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.5916 <
(Correct as of 11:00 GMT)
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