Euro Falls on Souring Outlook

During the Asian trading session, the Euro slumped very close to a 2-month low against the greenback as the outlook for the Eurozone continues to deteriorate. As reported at 11:10 a.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.2755, unchanged from the overnight trade in New York and off the 2-month low of $1.2717 struck on Thursday. Analysts point out that the pair is very close to a key support level at $1.2741, and if the decline continues the next likely target could be $1.2653, the 90-day average.

Yesterday, the European Central Bank announced that it would make no changes to its current monetary policy and left their benchmark rate at 0.75%. The ECB head, Mario Draghi, said that the Bank expected the Eurozone’s economies to show little improvement over the next few months, even in spite of the central bank’s efforts to ease market conditions.

Germany, the Eurozone’s economic driver, has been somewhat resilient but recent data suggests that a price is now being exacted; German trade data which was released yesterday showed a slide in exports at a pace not seen in nearly a year which is especially troubling to analysts who point out that the Euro’s steady depreciation has actually helped Germany’s exports in the past.