17, May 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

Euro prospects worsened this week. Due to the disappointing economic data from the euro area rumors have been strengthened about the subsequent easing of monetary policy by ECB.

China is trying to reduce the flow of "hot money" as a result we will have a diversification of foreign exchange reserves in the single European currency. Negative impact on the euro caused and heightened tensions between Israel and Syria that news weakened traders' risk appetite.

Mario Draghi, the president of the Central Bank, statement stimulated the euro weakening as well. In his speech Mario Draghi said that if weak data continues prevail the next few weeks the ECB is ready again to ease monetary policy.

In March, the euro zone retail sales fell by 0.1%, France 0.9% decrease in industrial production, however, it was expected a decline of 0.2%.

This shows that in the first quarter of the French economy remained in recession, and did not come out of it, as many had hoped.