Euro hovers above $1.36
The euro has lost ground to the US dollar today, trading at $1.3612, after the services sector in the eurozone slipped last month.
There has been mixed economic news from the eurozone as the revised gross domestic product figure was in line with expectations but the services PMI report missed analysts’ expectations. The minimal growth in the eurozone and the sliding services figures suggest the European Central Bank must loosen monetary policy.
As Alastair McCaig stated, traders are already pricing in some form of monetary easing. Mario Draghi has his work cut out for him as he must strike a balance between taking action while not using up all his options in one go. I suspect the monetary easing programme will be a gradual process.
If the euro goes below the recent low of $1.3591 the next support level down is $1.35. Should Mr Draghi leave the policy unchanged tomorrow the euro could head towards $1.3720.