Euro slips after IMF comments

The euro is off versus the US dollar after the International Monetary Fund (IMF) warned the eurozone debt crisis may happen again.

Yesterday the IMF warned that the financial problems of the eurozone could rear their ugly head again unless the European Central Bank (ECB) keeps the liquidity lines open. The organisation stated that the eurozone may grow by 1% next year, compared with a 0.4% contraction this year. Mario Draghi of the ECB has previously stated that monetary policy will remain loose as long as the region requires it.

Strong industrial production figures from Germany were not enough to boost the euro, after Germany announced a 1.4% increase in industrial production in August. The consensus was for a rise of 1.1%.

Janet Yellen has been announced as the next chairwoman of the Federal Reserve, taking over in January when Mr Bernanke’s term comes to an end. Ms Yellen is known for her dovish views and is likely to be in favour of keeping interest rates and the stimulus package in place, which could push the euro higher.

Spot FX EUR/USD chart

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