The EUR/USD currency cross is trading at $1.3723, down 0.1% following Mr Visco’s remarks which have offset the strong economic sentiment created by Germany’s Ifo report. The survey from manufacturers, wholesalers and retailers saw a February reading of 111.3, a two-and-a-half year high. The euro was trading higher versus the US dollar on the back of the report, but Mr Visco’s comments ensured the gains were short-lived. As interest rates in the eurozone are at an all-time low of 0.25%, the central bank has less to work with if it wants to stimulate growth.
The focus of the week will be the inflation and unemployment reports due from the eurozone on Friday. If inflation continues to decrease, and if unemployment were to increase, we could see the euro decline.
As Brenda Kelly stated, the 50-hour moving average is currently providing support, and $1.3680 is the next support level down.