The euro was weak against the pound and strong against the dollar yesterday afternoon. However, it is strong this morning, benefiting from sterling’s weakness.
Inflation figures for the Eurozone were released yesterday, which showed an annual drop to 0.8% in September, from 1% in the previous month. This came in below the expected figure of 0.9%, and was the lowest inflation rate since November 2016.
Balance of Trade figures were also released for the Eurozone, which showed that both imports and exports fell to their lowest level since December 2018.
Economic data continues to paint a bleak picture of the European economy, and could force the ECB to keep easing monetary policy.
Meanwhile, the European central bank governors of Austria, Robert Holzmannn, and the Netherlands, Klaas Knot, questioned the ECB’s revered inflation target of just under 2%, and have called for a radical re-think of the ECB’s stimulus policy. This comes a week before Mario Draghi’s last Governing Council meeting. According to Holzmann, there is a high chance that the inflation target could be modified under Draghi’s successor, Christine Lagarde.
