Euro dips as market eyes possible ECB stimulus

January 13, 2015 | 15:04

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The euro dropped somewhat against the dollar and other currencies on Monday (Jan 12) on expectations the European Central Bank could soon enact monetary stimulus.

Euro and Dollar (AFP)

NEW YORK: The euro dropped somewhat against the dollar and other currencies on Monday (Jan 12) on expectations the European Central Bank could soon enact monetary stimulus.

Besides the dollar, the euro dipped against the Japanese yen and the British pound. The single currency was unchanged against the Swiss franc.

"For the most part, the euro remains under pressure and we do not anticipate a significant rally this week," said BK Asset Management analyst Kathy Lien. Lien added that, "ECB officials continue to signal that (quantitative easing) is coming."

The ECB has been watching warily as inflation fell further away from its target level of just under two per cent last year as oil prices tumbled by half. ECB chief Mario Draghi has said the central bank could launch stimulus to counter weak inflation. The ECB next meets Jan 22.

Monday's trade saw the euro give back some of its gains from Friday, when it advanced on the dollar following disappointing US wage data.

Lien said weakness in the US job market will only delay and not stop" the US Federal Reserve from raising interest rates. "Instead of raising interest rates in the middle of this year they will raise rates in the fourth quarter."

AFP

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