Daily Analysis
iFOREX | Jan 05, 2009 07:00PM ET
We have all just witnessed the Euro fall to a three-week low against the dollar and declined versus the yen before data that will probably show slowing regional inflation, giving the European Central Bank more room to lower interest rates. “The market is leaning toward euro selling,” said Osao Iizuka, head of foreign-exchange trading at Sumitomo Trust & Banking Co. in Tokyo. “There are growing signs the ECB will cut rates. Speculation Obama’s stimulus package will be large enough to help the U.S. economy is also supportive for the dollar.” Inflation in the euro area probably slowed to 1.8 percent last month, according to the median forecast of 28 economists surveyed by Bloomberg News. The report from the European Union’s statistics office in Luxembourg is due today. The rate fell to 2.1 percent in November from 3.2 percent the prior month, the biggest reduction since at least 1991.
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