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The euro retreated again

02.10.2015
The main currency pair is falling again on Friday - it seems that investors will not risk, until they have all the facts at hand.

On Friday afternoon, the euro came under pressure again. The current quotation of the EUR/USD pair is 1.1159, a slight decline, but it can be clearly seen on small trading volumes.

Today the head of the European Central Bank, Mario Draghi, speaking to the Atlantic Council, he said that he sees signs of economic recovery in the Eurozone. According to him, a further integration of the euro area and the countries within it need to happen, so that the effect is more pronounced. But in the current environment, the situation does not look critical. Draghi stressed that over the past three years the monetary authorities have achieved good results in the process of stabilization of the Eurozone.

Optimism - is always good, even when the ship is sinking. At the moment, this does not apply directly to the Eurozone, as the QE program together with its significant volume is oriented to support the economic system. However, macro-economic indicators still suggest that the balance in the region is still far away.

Statistics released today showed that by the end of August this year, producer prices in the euro zone fell by 0.8% m/m (-2.6% y/y) against the July fall of 0.2%. In the EU, the August figure declined by 0.9%. There is no need to delve in the details of the components of the report, everything is already clear: the strongest pressure on the performance is the decrease in energy prices. Excluding this figure prices in the industrial sector decreased by only 0.2%.

Until the world economy either by strong-willed or economic means forces to even out the supply and demand of raw materials at the sites, inflation will be impossible control, no matter how much liquidity if poured into the system. There is nothing new or complicated with the fight against windmills, but sooner or later the ECB will get tired of doing it.
 
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