Euro Below $1.34 Ahead Of ECB Meeting

The euro remained under pressure on Wednesday. The common currency traded at $1.3357 at 6:00 GMT on Wednesday morning, reflecting investors’ caution ahead of the European Central Bank's Thursday policy meeting.

Recent economic data from the bloc indicates that the region needs further easing; however, most don’t expect that the ECB will to do so Thursday. Instead, bank president Mario Draghi will likely ask investors for more patience as the easing measures introduced at June’s meeting take effect.

Increasing the pressure on the ECB, inflation in the region declined to just 0.04 percent in July. That raised worries the bloc could fall into a period of deflation. The size of that risk isn't clear, as other data suggests prices will stabilize.

Related Link: Euro Weighed Down By Eurozone Data

The Wall Street Journal reported that producer prices rose modestly in June, which suggests inflation won’t sink further. On Monday, a Eurostat report showed that producer prices were up 0.1 percent since May, but fell 0.8 percent from June of last year. Though the figures provided some evidence that the eurozone is not headed for a period of deflation, most expect it won’t be enough to take the pressure off of the ECB.

Policymakers from struggling nations like France have been calling on the ECB to do more to help stimulate growth and restore the bloc’s competitiveness. With the ECB’s inflation target at 2 percent, the bank will have a lot of work to do before the region’s inflation figures can be considered stable.