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This morning’s announcements from the European Central Bank, showing disappointing yearly M3 money supply and private loans, will have done nothing to alter the market's perception that action is required in order to tackle the continuingly weak inflation rate.
Mr Knot’s comments, that negative interest rates remain a possibility, have partially contributed to EUR/USD once again heading to $1.3900, the top end of the range it has found itself entrenched in.
This lethargy from the currency markets is unlikely to last much longer, as tomorrow will see a number of economic releases that look set to ensure a touch more volatility. First we have inflation figures for Europe at 10am (London time), and then the advanced gross domestic product figures for the US at 1.30pm.
For the time being, the 50-day moving average appears to be acting as support for EUR/USD. Although it is heading higher, it has not yet moved into overbought territory. Convincingly breaking the $1.3900 level might be a step too far in the short term.