Insider Economy FOREX-Euro weakens as slowdown fears grow

FOREX-Euro weakens as slowdown fears grow

The euro fell on Tuesday as investors shifted their focus from progress in U.S.-China trade talks to an economic slowdown in the eurozone.

The single currency was buoyed on Monday as expectations grew for an easing of the U.S.-China trade conflict. But euro zone bond yields, notably those of German bunds, fell amid the cloudy European economic outlook, and that weighed on the euro.

When European Central Bank policymakers meet on March 7, they are expected to slash growth and inflation projections as the euro zone suffers its worst slowdown in half a decade.

“The euro is facing a tough week,” said Societe Generale strategist Kit Juckes. “Today, we get EU Commission forecasts, which will only tell us what we already know – the economy’s lost momentum and inflationary pressures remain non-existent. EUR/USD is likely to drift below $1.13 but probably not below $1.12.”

The euro was down 0.1 percent at $1.1309. It edged up 0.16 percent overnight, pulling away from a three-month low of $1.1234.

Traders are betting on a weaker euro in the coming months. They expect the ECB to maintain its easy monetary policy amid slow growth, tepid inflation and political uncertainty.

Elsewhere, the yen weakened to 110.715 yen against the dollar from 110.45 after Japan’s central bank governor raised the possibility of further policy easing.

Bank of Japan Governor Haruhiko Kuroda told the Japanese parliament the central bank was ready to ramp up stimulus if a rising yen hurts the economy and keeps Japan from hitting the bank’s 2 percent inflation target.

The Australian dollar, a barometer of global risk sentiment, was down 0.2 percent at $0.7113 after the Reserve Bank of Australia released its policy meeting minutes on Tuesday.

The minutes of February’s policy meeting, the first of the year, showed the central bank saw “significant uncertainties” in the economy as the once high-flying property market nosedived, a major reason rate cuts might be back on the table.


Top Stories

43 new cases of COVID-19 on Monday

The Health Ministry announced 43 new COVID-19 cases on 19 October, out of 2,558 laboratory tests, taking confirmed infections to 2, 687. The break-down of...

1420 only for emergencies regarding COVID-19

Due to the increased number of telephone calls to the telephone center 1420 of the Ambulance Service, it is pointed out that the center...

Anastasiades-Tatar to meet in UN premises

Cyprus President Nicos Anastasiades and the new leader of the Turkish Cypriot community, Ersin Tatar, will meet in the UN premises in Nicosia. Government Spokesman,...

Four people sentenced to imprisonment for abduction

The Larnaca District Court today sentenced four people aged 42, 22, 24, and 19 to imprisonment for abducting a 27-year old last August in...

Weather expected to be cloudy with local showers this week

The weather this week is expected to be cloudy with local showers, mainly in the afternoons. Partly cloudy on Tuesday with isolated showers and possible...


Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...


No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...