Sustaining Interest Rate Speculation ECB Euro, Eurozone Still Poor Performance

The euro traded higher versus the U.S. dollar amid speculation that the European Central Bank will act to stimulate the economy in the 17-state region. 

Official data on Tuesday (30/4) showed that inflation in the euro zone has fallen to the lowest level in three years, and unemployment reached a new record, which will raise expectations lowered interest rates by the European Central Bank (ECB) in order to revive the economy that has been stagnant .A series of disappointing euro zone data, it has increase the odds of the ECB to cut interest rates in the next policy meeting May 2. 

Bureau of Statistics European Union (Eurostat) Indicates that, inflation in the euro zone slumped to 1.2 percent in April, the worst level since February 2010, and is the biggest monthly drop in more than four years. It was as if reflecting the danger of economic recession. With the rising cost of living, inflation rate was well below the estimated ECB, still just under 2 percent. While economists projected inflation would be at the level of 1.6 percent for the month.
Eurostat also reported that the unemployment rate hit a record 12.1 percent of the working population in March. Economists believe that with a series of bad data will encourage the ECB to cut interest rates as soon as possible this week in order to stimulate the economy has entered a second recession since 2009. 

Inflation blocks the Euro hitting a 3-year and a surge in unemployment to record highs, it adds to the anxiety that previously presented by German retail sales drop in March.While Spain's economy shrank in the first quarter (Q1) 2013, as the recession has devastated state jobs who are struggling to get out of the recession.This is as reported by the Business Times and sindonews, Tuesday (04/30/2013), in which the Spanish National Institute of Statistics expressed, weak domestic demand dragging output fourth largest economy in the euro zone shrank since mid-2011 or in seven consecutive quarters. 

Jeremy Stretch, currency strategist at CIBC World Markets argues, "If the ECB actually decided to cut interest rates and announced measures to improve the non-standard credit flows, we will be able to see the Euro pushed higher. However, any increase above $ 1.32 is still considered a good opportunity to sell '.