Knot drives euro higher

The euro has gained ground on the US dollar after Klaas Knot of the European Central Bank (ECB) voiced his opposition to quantitative easing (QE).

The EUR/USD is trading at $1.3866, up 0.25%, after the Dutch central banker stated he would not like to go down the route of QE. Although, Mr Knot did mention that negative interest rates was possible.

The ECB has come under fire recently as the level of inflation in the eurozone is at 0.5%, well below the 2% target. Central bankers are divided over whether the ECB needs to act.

We are not expecting any major economic announcements from the eurozone today, but Germany will reveal its latest inflation figures tomorrow at 7am (London time). The consensus is for a drop of 0.1%, but a worse-than-expected result could drag the euro lower.

There have been reports of guns fights in eastern Ukraine between Ukrainian forces and pro-Russian radicals. Stan Shamu noted that the EU was considering placing restrictions on Russia, which could push the euro towards the 50-day moving average of $1.3815.

Spot FX EUR/USD chart

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