Euro awaits Bundesbank report
The euro is trading at $1.2750. The single currency traded within a tight range overnight, and the one for morning traders will be the Bundesbank report at 11am (London time).
The European Central Bank is still under pressure to tackle deflation. Mario Draghi has discussed the possibility of using ‘unconventional tools’, which some have interpreted as quantitative easing. Germany seem to be the biggest opponent to such a stimulus package so the Bundesbank update will give us an idea of whether the country is changing its tune.
There has been little mention of Greek bond yields this morning and the debt crisis could be entering another phase. If there is a surge in the cost of borrowing it could drag the euro lower. A suggestion that Germany could be open to QE could drive the euro to $1.2640, but only a firm ‘No’ could push it to $1.2840.