The euro had a generally weak day yesterday, dropping against the majority of its trading partners. This was partly due to the European Central Bank (ECB) Vice President Vitor Constâncio stating that ‘the prospects for inflation are a cause for concern’ as inflation data for March had slowed to 0.5 per cent in March – the lowest level in over four years. Constâncio also said that recovery in the region is still very much exposed to negative effects outside the Eurozone. It wasn’t all bad news however, as he also mentioned that April’s figures are expected to ‘correct’ the drop in March, adding, “We see no deflation prospects, that this regime of low inflation could lead to real deflation. We don’t expect that at all.”
No other major data was released yesterday, but today the ECB is due to meet for its monthly monetary policy meeting. This will be followed by a speech by ECB president Mario Draghi, who predicts that steady recovery in the area will push inflation back up nearer the ECB target of just under 2%. Any other deviation is sure to cause movements in the market, so call now for the latest news.
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