EUR/USD at 1.3630 as Inflation and Jobs Weigh on ECB

The euro was 0.3 percent from its lowest level in three months before data tomorrow predicted to cement the mix of slow inflation and near-record unemployment that may force the central bank to act.

Europe’s common currency extended a drop in May versus the dollar, its biggest in four months, with analysts forecasting the European Central Bank will become the first among its major peers to take interest rates into negative territory when it sets policy on June 5. The greenback climbed versus a majority of its 16 counterparts before a report predicted to show manufacturing last month expanded at the fastest pace this year.

“We’ve seen very consistent euro selling from the leveraged sector, which tends to suggest that investors are anticipating fairly impressive action from the ECB,” said Todd Elmer, a Singapore-based currency strategist at Citigroup Inc. “The dollar continues to benefit on this basis.”

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.