Euro Likely To Slide This Week

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The euro settled at $1.355 at 5:25 GMT on Tuesday morning after falling to a two month low on Monday as investors looked to the ECB for further easing.

The euro has faced a bumpy road this January after ECB President Mario Draghi opened the door to more easing at January's policy meeting. Draghi said the bank was prepared to cut rates or take action by unconventional means if interbank lending rates rose. On Friday, the region's overnight bank-to-bank lending rate rose to 0.30 percent, above the 0.25 percent rate the ECB charges.

See also: #PreMarket Primer for January 21: China's Central Bank Adds Record Amounts Of Cash To Market

Reuters reported that some analysts see the euro slipping this year, with near term factors taking the common currency to $1.33 this week. The US dollar is set to improve this year as the Federal Reserve tapers its bond buying pan, which could take the euro as low as $1.20 by the end of the year.

However the eurozone is continuing to pull itself out of its longest ever recession as national governments buckle down with tough austerity programs designed to reduce their debts. Moody's Investors Service announced on Friday that Ireland's government bonds have finally shed their junk rating to Baa3. Ireland, one of the eurozone's first bailout nations, exited its bailout program last month and is slowly regaining access to debt markets. Moody's cited the nation's exit from its bailout program as well as its promising growth potential as reasons for the upgrade.

Moody's was the only firm which rated Ireland below investment grade during the crisis. Both Standard & Poor's and Fitch Ratings maintained investment grade ratings throughout Ireland's three year crisis.

Posted-In: European Central Bank Mario DraghiNews Eurozone Commodities Forex Global Federal Reserve Pre-Market Outlook Markets Best of Benzinga

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