EUR/USD at 1.3720 as Slowdown Spurs ECB Easing Bets

The euro traded near a five-week low as signs of sustained economic weakness in the region boosted speculation the European Central Bank will step up measures to lift growth and spur inflation.

The euro was little changed after a five-day drop before a report today that may confirm a decline in Germany’s consumer price index and data that may show industrial production in the region declined in March. The pound traded near a 16-month high against the euro before employment data and the central bank’s inflation report today. The Australian and New Zealand dollars rose as their implied volatilities remained near the lowest in at least a year and as Asian stocks advanced.

“The euro is being sold against the dollar on the prospect of ECB easing, and the market will be paying attention to central bank officials,” said Yuki Sakasai, a currency strategist in New York at Barclays Plc. “A gradual recovery in the U.S. economy is firmly in place, and that will cause the dollar to rise against the yen in the medium to long term.”

Bloomberg

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