The pressure on the Euro appears relentless as speculation that the ECB is prepared to ease further continues to grow with the result that the Euro has now fallen to a new 1-year trough versus the U.S. Dollar. Market players are anxiously awaiting the outcome of this week’s European Central Bank policy meeting, and especially Mario Draghi’s news conference which follows, for any indication that the ECB is ready to fully engage all available tools to put an end to the Eurozone’s growth slump. At last month’s Jackson Hole central bankers conference, Draghi’s speech led investors to believe that the ECB is on the verge of Quantitative Easing, or money printing as its been called, which remains, at least in the Eurozone, a controversial measure that many analysts believe would likely be Draghi’s last choice.
As reported at 7:24 a.m. (EST) in New York, the EUR/USD dipped to $1.3110 on the EBS trading platform, matching last September’s low; meanwhile, the EUR/GBP pair was trading at $0.7934 while the EUR/JPY was trading at 137.6480.
Dollar Higher as Markets Await NFP
On the flip side of the EUR/USD equation, the U.S. Dollar has seen a broad rally, with the Dollar outperforming most of its major peers including the Pound Sterling and Japanese. In large part, the Dollar’s strengthening has been a result of the Fed’s rhetoric that an interest rate hike might soon be in the making given the improvements to the U.S. economy and the labor sector. This week’s release of NFP results, provided a robust number of new jobs created, could help to cement that speculation.