The ECB has forecast improvements in the Inflation outlook but if prices keep falling there is scope for some kind of monetary easing which would likely weaken the Euro. GBPEUR and EURUSD have been fairly flat and range bound in the last few months, this could be a trigger to higher or lower prices depending on the outcome.
Greece was positively in the headlines yesterday as Greek bonds were 8 times oversubscribed by investors. Greek debt was one of the causes of Euro weakness which two years ago saw the Euro plummet. Yesterday’s news marks a turning point and could underline a renewed round of Euro strength depending on some other issues.
This morning’s German CPI Inflation data has shown no changes which has given the Euro a small lift. Spanish CPI just released has fallen slightly. With Inflation fast becoming a major headache for the ECB, this is the key topic. There have been numerous discussions of late about extra measures the ECB will take if the overall figures fall.
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