The Euro struggled to maintain momentum following unexpectedly poor data from Germany which showed that while IFO business sentiment improved somewhat in September’s reading it was not to the extent that as poll of economists had expected. Market strategists believe that now that the Germany chancellor election is over and with Angela Merkel continuing her role that some Eurozone problems, such as Greek aid, which had faded to the background, are likely to once again come to the fore.
As reported at 11:42 a.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.3474, not far from late trading in New York and about 0.4% lower for the week. The USD/JPY pair slipped to 98.63 Yen, a loss of 0.1% and a total drop of nearly0.7% since Monday. Some market players believe that the Yen is likely to move higher but that a rise in U.S. Treasury bond yields will first have to occur.
ECB Comments Still Weigh on Euro
The Euro was feeling continued pressure emanating from Mario Draghi’s very dovish comments on Monday, which were reinforced by ECB colleague Ed Nowotny on Tuesday when he said that the ECB was not ready to begin withdrawal of its current crisis measures and stood ready to provide additional liquidity as and when needed.