The euro dropped off yesterday, losing ground against the majority of its peers. This involved losing half a percent against both the US dollar and the British pound. Speculation is growing that the European Central Bank (ECB) will look to further advance stimulus measures, as covered bonds were purchased for the second consecutive day. There was also a report released by Reuters stating that the ECB is considering buying up chunks of corporate debt. There are some reports surfacing that suggest the ECB will as much as double its previous plans – a further divergence in policy from that of the US Federal Reserve – giving more fuel to the sentiment that the US dollar will continue to strengthen against its European counterpart.
A quiet day on the European data front today means that eyes will be on the Bank of England meeting minutes and US inflation data, both of which can impact the euro’s performance against the respective currencies.