The Euro to US Dollar (EUR/USD) exchange rate pushed higher on Monday after hopes for the European Central Bank to introduce stimulus measures increased following the release of disappointing inflation data and as weaker than forecast PMI data out of the US weighed upon the ‘Greenback’.
The single currency initially fell sharply to a session low following the release of the latest inflation data for the Eurozone which came in at its weakest level since 2009. It quickly rebounded to make gains against several major peers as investors raised their bets that the ECB will announce stimulus measures in the near future.
Economists however do not believe stimulus will be introduced this week.
“There’s still a case for easing, but we don’t think there’s going to be enough agreement within the Governing Council members to ease on Thursday,” said an economist from Citigroup.
The US Dollar fell further in the afternoon after the latest PMI for the Chicago region came in below expectations. According to the market Institute for Supply Management its Chicago PMI fell to a seasonally adjusted figure of 55.9 this month, down from the previous figure of 59.8. Economists had been expecting the figure to come in at 59. The figure was the lowest reading seen in eight months.
The currency was also weighed upon by comments made by Federal Reserve Chairman Janet Yellen who said that she expects monetary easing to remain in place for the long run as the economy struggles to recover from the effects of the Great Recession.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3803 ,
Euro,,British Pound,0.8291 ,
Euro,,Australian Dollar,1.4921 ,
Euro,,Canadian Dollar,1.5206 ,