The euro weakened against the dollar yesterday following the release of a larger than expected trade deficit for the eurozone. Data released by Eurostat showed that the eurozone recorded a trade deficit of €10.5 billion in January, widening sharply from a revised €1.7 billion deficit in December. The euro fell to a four-day low of 1.3485 against the dollar. Last week it hit a 2 and a half month high of 1.3738.
European Central Bank President Jean-Claude Trichet said in a Wall Street Journal interview that the central bank could lower its interest rate further, which at the moment is at a record low of 1.5%. However, he also said he does not see any impending need to modify current stimulus plans.
There are several significant announcements taking place in the eurozone this morning, including Purchasing Manager Index Manufacturing and Current Account data at 09.00 GMT. In the US, Housing Price Index, Retail Price Index and the Richmond Fed Manufacturing Index will be released at 14.00 GMT.
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