The common currency Euro struggled for traction against the US Dollar but managed to eke out a small recover after the latest economic data and growing concerns over an early Italian election weakened sentiment for the Euro. Preliminary inflation data on a year-over-year basis for the month of May fell to 1.4% against expectations of a fall to 1.5% from 1.9%. Core CPI also fell to 1.0%, as expected, from 1.2%; core inflation strips out volatile components like food and energy prices.
As reported at 11:00 am (BST) in London, the EUR/USD was trading at $1.1193, a gain of 0.08%; earlier in the session, the pair had hit a trough of $1.1165 while the peak stands at $1.1197. The EUR/GBP is down 0.03% to trade at 0.8729 Pence, off the session low of 0.8695 Pence while the high for the day is at 0.8748 Pence.
Draghi’s Thoughts Unclear
Investors are still waiting to see what action the European Central Bank might take given perceived improvements to the Eurozone economy; the Mario Draghi, ECB chief said on Monday that the Eurozone continues to need “substantial” stimulus. One economist in Japan said that the key scenario is for the central bank to taper stimulus gradually. However, Draghi has offered no indication as to when this might begin and that is keeping the Euro under some pressure. The next ECB monetary policy decision and announcement will be made on June 8th.