By: DailyForex.com
Ahead of a looming ECB meeting, Euro investors are nearly certain that the outcome will further devalue the common currency. As a result, the Euro dipped close to a 7-month trough versus the greenback. A disappointing figure for Eurozone CPI is also weighing on the Euro. Eurostat reported that November’s preliminary inflation figure remained flat at 0.1% against expectations of a slight uptick to 0.2%. At the same time, core inflation, which excludes food and energy prices, fell more than expected to 0.9% from 1.1%.
As reported at 10:48 am (GMT) in London, the EUR/USD was trading at $1.0589, down 0.34% and not far from the session low of $1.0582; the pair’s high for the day was set at $1.0635. The EUR/GBP was also lower at 0.7036 Pence, down 0.18%; the pair ranged from 0.7028 Pence to 0.7071 Pence in today’s trading.
Dollar Recovers from Latest Stumble
The fact that inflation remains far below the ECB’s 2% inflation target suggests that there’s little doubt that the ECB will be compelled to lower interest rates further. That, of course, has helped the greenback to recoup earlier losses after the release of dismal manufacturing data from the US. Yesterday, the Institute for Supply Management released manufacturing PMI data for November; the reading came in at 48.6, far below expectations of a slight rise to 50.3. For reference, any figure below a 50.0 threshold signifies contraction. According to analysts, though the Federal Reserve is likely to raise interest rates before the year’s end, this data is still a bit worrying.