The Euro earlier struck a 6-week trough as investors speculate that the European Central Bank might be force to take immediate action to prevent the Eurozone economy from further deterioration.
The ECB’s monetary policy meeting will be held later this week, and some investors and analysts, including those from Swiss banking giant UBS, believe that Mario Draghi might cut the benchmark lending rate while others believe he will only hint at that possibility and introduce a rate cut at December’s meeting instead.
As reported at 12:21 p.m. (JST) in Tokyo, the EUR/USD was trading at a low of $1.3442 during Monday’s Asian session, a level not seen since mid-September, before edging up slightly to $1.478, still a loss of 0.1%. Analysts who believe that an interest rate move won’t be forthcoming until December anticipate that the common currency will get a fair bounce on Thursday once it’s clear that a rate cut is still on hold. The EUR/JPY pair slipped 0.1% to trade at 133.10 Yen, recovering slightly from Friday’s fall to 132.60 Yen.
Aussie Boosted by Home and Chinese Data
In Australia, the Aussie got a boost from unexpectedly strong retail sales data which followed the release of improved numbers from the Chinese services sector which indicated that China’s economy continues to stabilize. The AUD/USD pair edged 0.4% higher to $0.9480 moving well away from the 3-week low of $0.9421 which was struck just last Friday. The Reserve Bank of Australia holds its policy meeting tomorrow and a recent poll of economists suggests that the RBA’s monetary policy will remain unchanged with the benchmark rates left at the current 2.5%.