The euro
traded lower for the first time in three sessions on Wednesday after the release
of downbeat data from the euro area that raised expectations the ECB would add stimulus
in September to boost the economy.
Economic
data released today from the European Union's Bureau of Statistics showed that
economic growth in the eurozone halved from April to June, while inflation fell
sharply in July.
The preliminary
estimates of GDP growth in 19 nations sharing the euro slowed to 0.2 percent on
a quarterly basis, down from 0.4% in the previous three months. On the annual
basis, the growth pace slowed to 1.1 percent from 1.2 percent.
As
slowdown in economic growth in the region was reflected of course on consumer
price growth, where data showed that the annual inflation rate for the euro
zone in July retreated to a 17-month low of 1.1 percent from 1.2 percent in
June.
This
inflation rate is still far from the ECB’s target of close to 2 percent. So,
the ECB may need to stimulate the economy in the coming period.
The euro
fell on Wednesday ahead of the Fed's interest rate decision later today, as
policymakers are expected to slash interest rates for the first time in 10
years.
With the
interest rate cut already a quarter percent, the main focus has been on whether
the Fed will announce more easing later in an effort to keep the prevent the
negative impacts from the slowing global economy and the repercussions of trade
disputes.
As of 12:00 GMT the European common currency fell
about 0.05 percent to 1.1147 versus the dollar after hitting a bottom at
1.1143.