Euro Starts The Week Higher
The euro has gained 0.19% versus US dollar today. The euro/dollar pair is trading at 1.1791 level. Traders should be ready for some volatility from EUR/USD pair, as markets await meeting of the European Central Bank on Thursday.
The ECB has already said the 2.55 trillion euro ($2.99 trillion) asset purchase program’s fate will be on the agenda on Thursday. Last week, Peter Praet (ECB chief economist) told that inflation signals were improving. As market expectations of further asset purchases wane, he noted that inflationary expectations have moved in line with the ECB’s 2% target. The economist also pointed to the underlying strength of the Eurozone economy.
However, some analysts question whether the time is right to stop QE at a time when political risk has increased in the Eurozone, creating the potential for further market volatility. One of the biggest uncertainties facing the Eurozone right now is Italy.
The G7 summit, held in Canada, revealed a deep split in trade and tariffs between Trump and other leaders, as the US president refused a joint communiqué and lashed out with accusations against Canadian Prime Minister Trudeau. According to Trump, the United States is at a disadvantage when it comes to global trade and is losing out on tariffs imposed by other countries. But for many US trading partners, the criticism of the President sounds unfounded, given that the United States is setting its own tariffs.