Rate continues to drop: Euro at their lowest since 2006 – Daily Mirror

Rate continues to drop: Euro at their lowest since 2006 – Daily Mirror

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So deep was the euro last nine years ago: The situation in Greece and the monetary policy of the ECB, the common currency on the let fall lowest level since early 2006.

The euro has fallen to its lowest level in about nine years because of the prospect of a further opening of the floodgates by the ECB and the uncertain situation in Greece.

In the first trading hours of the new week, the price of the common European currency fell on Monday to 1.18 dollars. That was the lowest level since March 2006. Most recently, however, the euro recovered somewhat, but stood at $ 1.19 is still well below the 1.20 mark dollars, under which he had last been in the summer of 2010.

Greece policy causes unrest

Dealers justified the renewed losses with the monetary policy of the European Central Bank (ECB) and the situation in Greece. Three weeks before the local election debate about an exit of the crisis country from the euro zone is back in full swing. The trigger is a “mirror” report, after the federal government now holds a departure of the heavily indebted country from the common currency for acceptable.

With the decline of the euro continues to decline in recent months. In May of last year, the European single currency had cost almost $ 1.40, but then lost continual decline. The ECB had introduced in the summer as the first major central bank in the world “penalty interest” on deposits of banks.
This means that European financial institutions for parked at the central bank must pay interest, rather than as is usually the one to get.

Draghi struggles to price stability

ECB President Mario Draghi wants to boost lending and thus the economy, especially in southern and prevent too low inflation. The rationale for this however largely fizzled. Draghi had therefore recently announced always ready to take further steps to be. Only on Friday he had reiterated this commitment in an interview with the newspaper “Handelsblatt” and thus pushed the euro exchange rate towards $ 1.20.

“The risk that we will not fulfill our mandate of price stability is higher than six months ago,” he told the newspaper. The European Central Bank is therefore in the technical preparations “to change the scope, pace and composition of our measures the start of 2015, this should be necessary to respond to a long period to low inflation”.

The United States wants to tighten monetary policy

The statements scattered according to traders the last doubts that the central bank in the fight against the excessively low inflation will soon begin with the controversial purchase of government bonds. While the euro zone is heading to a further easing of monetary policy, the Fed moves toward tightening its monetary policy.

The prospect of a first rate hike in the US after the severe financial and economic crisis boosted the dollar and the euro is in return under increasing pressure.