The euro on Thursday reached a new two-month low against the dollar in international foreign exchange markets after the European Central Bank (ECB) kept key interest rates at record low levels, assessing that the economy shows no signs of recovery.
In such circumstances, the euro briefly fell to $1.2716, the lowest level since September 7. It then traded at $1.2737, indicating a loss of 0.25 percent compared to the previous close. The single European currency also weakened against the yen, dropping to 101.57 yen, close to the lowest level in four months.
The dollar, on the other hand, weakened by 0.13 percent against the yen, to 79.88 yen. The focus was on the press conference of ECB President Mario Draghi, held after the key interest rate in the eurozone was maintained at 0.75 percent. At the regular monthly meeting, according to Draghi, politicians did not discuss plans for the next year.
The latest weak indicators from the eurozone, which also showed weaknesses in Germany, fueled speculation that the ECB might ease monetary policy by the end of the year.
Among the latest bad economic news is the data on German exports, which sharply decreased in September, affected by subdued demand from Europe.
– “The European economy needs to revive. If the ECB won’t do it, who will? The euro will continue to weaken as there are no signs of recovery in Europe, and activity continues to weaken elsewhere in the world,” said Joseph Trevisani, chief market strategist at Worldwide Markets.
Investors were somewhat encouraged by today’s Spanish auction, which attracted strong investor interest.
