FRX: Euro Declines against the Dollar on Expectations of Further Stimulus
The euro plunged versus the U.S. dollar on Monday on speculation that the European Central Bank may roll out additional monetary stimulus this week.
The 18-nation currency declined to $1.3610, close to $1.3586, the lowest level in three months which it hit last Thursday. The currency also declined against the sterling pound to 81.25 pence.
The ECB financial stability committee, which will meet this Thursday, may introduce measures such as reduced interest rates, asset-purchase programs and negative deposit rates.
“With market participants unwilling to be brave enough to take against-consensus euro long positions ahead of the meeting, and the potential for an upside surprise in US data, we expect euro/dollar to remain under pressure,” Petr Krpata, a currency strategist at ING, told Reuters. “The euro should move back closer to $1.3600 level, while the 200-day moving average of $1.3644 is now an important level to watch.”
