The Euro remained close to a recently struck 1-month trough versus the greenback but FX traders also remain wary of the likeliness of the European Central Bank to ease in order to stimulate the economy in the Eurozone area. Late last week, the head of the ECB cautioned investors that it was prepared to immediately take action if conditions warranted, effectively putting an end to Euro’s bulls hopes that the common currency’s uptrend would endure. Currency analysts say that the Euro could find some support at around the $1.35 level, however, given that the disinflationary price trend relative to peers in economies experiencing higher inflation.
As reported at 11:25 a.m. (JST) in Tokyo, the EUR/USD pair traded at $1.3755, holding close to Friday’s low of $1.3745; since last Thursday after the ECB policy announcement, the common currency has slipped some 1.2% in value relative to the U.S. Dollar. The EUR/GBP traded at 81.56 pence, coming off Monday’s los of 81.43 pence; the Pound Sterling is finding some support on the back of a possible interest rate increase from the Bank of England; the GBP/USD also moved higher, trading at $1.6869 after hitting Friday’s 1-week trough at $1.6832.
AUD/USD Players Await China Data
The AUD/USD is trading today within a tight range of $0.9352 and $0.9363, though recently the Aussie Dollar drifted to the low end of the range against at $0.9354 as FX players await the imminent release of data from China which could reinforce speculation that the economy there is finally showing signs of steady improvement. The Australian Dollar is closely tied to the Chinese economy, given that China is their largest trading partner.