Currency News: Euro Slips Below 1.07EUR/USD After Paris Attacks
Currency Story
On Monday the EUR/USD did not have a lot of movement as it traded at 1.0735 in the European session. The currency is under pressure after the horrific attacks in Paris that killed at least 132 people and injured over 300.In economic news, Eurozone CPI readings met expectations.ECB President Mario Draghi is talk at an industrial conference on Monday, and will probably talk about the attack in Paris. In the United States the main event is the ESM(Empire State Manufacturing Index).
The different attacks that happened on Friday 13th in Paris was the biggest terrorist attack the country has ever seen and this situation has sent shock waves around the world and it has hurt market risk sentiment in the process. Because of this the Euro went down below the 1.07 level in Monday’s Asian session, and the currency remains under pressure. The Euro has been on a steep slide over the past month and has lost 800 points against the USD.
ECB head Mario Draghi testified before an ECB monetary committee on Thursday. Draghi made note of weak inflation in the Eurozone and stated that the ECB would “reexamine the degree of monetary policy accommodation,” THe question now is if the ECB will increase stimulus in December. Even if the central bank doesn’t make a move next month, we most likely will see the current easing program extended beyond September 2016. The FE most likely will raise rates in December, monetary divergence has sharpened and will continue to weigh on the euro, which is struggling at low levels.
US numbers on Friday were a mix. Retail Sales and PPI both fell short of expectations. Retail Sales came in at 0.1%, while Core Retail Sales was only marginally better, with a small gain of 0.2%. PPI came in at -0.4%, as the manufacturing inflation indicator posted a second straight decline.The results of PPI whas -0.4%, as the manufacturing inflation indicator posted a second straight decline. On Tuesday, we’ll get a look at US CPI and Core CPI, the primary gauges of consumer inflation. These indicators could play a crucial factor of whether the Fed makes a move and raises rates next month.Strong CPI readings could win over Fed policymakers who are concerned about whether the economy is strong enough to withstand a rate hike. So traders should be prepared for volatility after the CPI releases.
