Euro flat ahead of Weidmann statement

The euro is broadly unchanged versus the US dollar as traders await Jens Weidmann’s announcement at 12.30pm (London time).

Mr Weidmann, the head of the German central bank, last month branded the discussion about breaking up the eurozone as ‘reckless’. He went on to say that any nation which leaves the currency union could suffer grave ‘consequences’. There has been growing speculation that Greece will need additional funding in 2014, when its second bailout programme comes to an end, and Mr Weidmann stated that writing off some of the nation’s debt will not solve its problems. If his statement today is bullish in regards to the eurozone, we could see the euro trade upwards to the $1.36 level.

EUR/USD received a boost on Wednesday, when the Federal Reserve kept its bond-buying programme unchanged at $85 billion per month. The stimulus package assists the US economy, but at the same time keeps the US dollar under pressure. The market consensus was for a reduction of $10 billion in the bond-buying scheme, and when this was not delivered traders bought the euro, pushing it close to a seven-month high against the US dollar.

EUR/USD chart

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