EUR/USD Heads Lower on Eurozone Outlook

The eurozone economic recovery continues to be extremely sluggish, resulting in a lower euro today. Concerns about what’s next for the eurozone have the euro weaker against the US dollar, even though the 18-nation currency is holding its own against other counterparts.

The latest news out of Germany includes slower growth and Bund yields below 1.0 per cent. As a result of the latest, the ECB will have to continue its loose monetary policy. However, many investors aren’t as enthused as they were earlier about the tactics employed by Mario Draghi. As the recovery drags on and recession threatens again, concerns mount and the euro struggles.

Not helping the situation is the fact that another round of sanctions against Russia may be coming. The sanctions have been hitting the German economy and the eurozone economy as Russia engages in tit-for-tat over the issue of Ukraine-related sanctions.

However, the euro is still holding its own against the yen and the pound (thanks to British inflation data), even though it is down against the dollar.

At 12:23 GMT EUR/USD is down to 1.3355 from the open at 1.3363. EUR/GBP is up to 0.8027 from the open at 0.7989. EUR/JPY is also a little higher, up to 137.1025 from the open at 137.0710.

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