The euro dropped as the European Central Bank (ECB) is considering a negative deposit rate if more economic stimulus is needed, according to two people with knowledge of the debate.
The dollar fell versus the yen as consumer prices in the U.S. declined for the first time in six months, damping expectations that the Federal Reserve will trim monetary stimulus. The Australian dollar extended losses after the International Monetary Fund said the currency was 10 percent overvalued and that the central bank should maintain easy policy settings. The Federal Reserve releases the minutes of its October meeting at 2 p.m.
"Taking the deposit rate negative that will have negative implications on the euro," Eric Viloria, senior currency strategist at Gain Capital Group in New York, said in a phone interview. "If banks have to pay money in order to park cash with the ECB, it's going to make them reluctant to do so, and make investors reluctant to hold euros."
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
