Euro tumbles on ECB Coeure’s comments for more QE, Greece still weighs

The euro fell sharply in early European session trading on Tuesday on comments from the European Central Bank’s policymaker Benoit Coeure who said that the Bank will “slightly” increase bond purchases in May and June due to low market liquidity in July and August.

Currently the ECB’s quantitative easing (QE) program involves buying 60 billion euros ($67.3 billion) of assets per month with the aim of boosting the Eurozone economy.

Meanwhile the single currency is also being weighed by concerns over Greece and when would it reach a cash-for-reform deal with its foreign creditors that could unlock further loans to the cash-starved country. Greece’s new government has been in talks with its European Union and International Monetary Fund lenders over the past four months about the release of around 7.2 billion euros ($8.1 billion) in aid. Things would get difficult for Greece if there is no deal before June 5th, which is when it has to make a debt payment of 1.5 billion euros to the IMF. Greece’s creditors have been demanding the government to implement reforms, including pension cuts and labor market liberalization. However this has been a sticky point for Greece.
The euro tumbled below the key $1.12 level to touch 1.1159 in early European session trading. Against the yen, it fell below 135.00.

Looking ahead to the rest of the day, markets will focus on some interesting data that is expected out of Europe. Germany will release the ZEW investor sentiment survey about the economy. Forecasts are for a mild slowdown from April. Also important to watch out for today will be Eurozone final inflation for April. The year-on-year figure is expected to remain flat.

The post Euro tumbles on ECB Coeure’s comments for more QE, Greece still weighs appeared first on Forex Circles.

Source:: Euro tumbles on ECB Coeure’s comments for more QE, Greece still weighs

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