The common currency was trading close to a 1-week peak versus the U.S. Dollar and the Japanese Yen following the release of better than expected data from Germany which briefly tamped down investors’ expectations of an ECB rate cut. Germany, as the largest economy in the Eurozone, experienced a surprise and marked uptick in industry orders during September, both on a month-to-month and on a year-over-year basis, with readings escalating to 7.9% from 3.1% on an annual basis. That is seen as sufficiently strong to allow the European Central Bank some maneuverability, which analysts say means it is more likely that they will hold off on a rate cut announcement until next month’s policy meeting.
As reported at 10: 08 a.m. (JST) in Tokyo, the EUR/USD pair traded at a session high of $1.3548, moving away from Monday’s low of $1.3442 and was recently trading at $1.3513. The EUR/JPY hit a peak of 133.72 Yen, nearly 150 pips away from Tuesday’s trough with a recent price at 133.32 Yen.
Draghi Could Address Too Strong Euro
While a recent economists’ poll supports the notion that the ECB might wait until next month, there is growing concern over the Euro’s recent appreciation which is weighing heavily on the Eurozone’s economic recovery. Given that, some analysts still believe that Mario Draghi may strongly suggest that there might be a need for intervention at some point in order to address growth and inflationary issues. The ECB will announce its monetary policy and interest rate decisions later today.