Growing speculation that the European Central Bank will cut interest rates in three week's time has boosted the euro this morning Over the weekend, five members of the bank's governing council hinted that a rate cut was very possible at their meeting early next month. The speculation means that this week's GDP data from Germany and France and this morning's eurozone inflation figure for October will be closely watched. A provisional inflation reading put the consumer price index at 2.2pc, up from 2.1pc in September.
Hopes that the bank will ease borrowing costs have helped the euro as a rate cut would indicate that the bank was turning to a more growth focussed agenda and moving away from its traditional inflation led policy. "The talk is now of low growth prospects rather than inflation, with the latter issue seemingly being put to bed by comments by ECB council members such as 'we're meeting our inflation goal' and 'the inflation risks are not that big'," said Rossa White at Davy Stockbrokers. The euro is trading above USD1.0100 against the dollar again, while it has also risen against both the yen and sterling, moving close to 64p on the pound again //www.fxcentre.com