Upbeat economic data from the Eurozone area left investors speculating that the European Central Bank might reconsider its recent rhetoric and hold tight on rhetoric about additional stimulus. As a result, the common currency Euro moved broadly higher during the Asian trading session. However, according to officials from the ECB, investors should exercise caution because the release of a few unexpectedly stronger indicators would likely not be sufficient to change monetary policy, though quantitative easing was still only one possible consideration.
As reported at 11:53 a.m. (JST) in Tokyo, the EUR/JPY traded at 142.18 Yen, a 3-week peak and then edged back to 141.97 Yen. The EUR/AUD also traded at a 5-week peak at A$1.4985 while the EUR/USD dipped to $1.3852 from a 2-week peak of $1.3880. Analysts point out that additional gains for the common currency are likely limited given the light trading week in Asia, however.
Eurozone Inflation Data Draws Market Focus
More Eurozone data will further help FX traders gauge monetary policy there; inflation data from Germany are due out later today and then the overall Eurozone area’s figures are due out tomorrow. BNP Paribas analysts say that the German data is key and that if the numbers surprise to the downside expectations of ECB easing will resurface.