Euro is still Under Pressure
EURO ZONE, Sept. 19 – The Euro traded around $1.066 in September, close to low levels not seen since March, as traders assess the monetary policy outlook.
The ECB raised borrowing costs for a 10th consecutive meeting this month, pushing the deposit facility rate to a record high of 4%, but traders bet the current rate-hike campaign is over.
The central bank added that borrowing costs have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target, signalling the peak in rates has been reached.
At the same time, there are growing indications that the Eurozone economy is on the brink of entering a recession, and doubts mount the ECB will be able to tighten monetary policy further under these conditions.
The Euro is little changed on the year but lost more than 5% against the dollar after peaking in mid-July to $1.12.
