(menafn – ecpulse) Markets are relatively calm ahead of a new string of first-tier confidence data from the euro zone on Tuesday, after European Central Bank Mario Draghi underpinned the impact of the single currencys strength on growth again.
As of 07:04 GMT, the euro was little changed around 1.3356 against its U.S. counterpart, after swinging tightly to a session high of 1.3360 and low of 1.3338.
Mario Draghi, Chief of the European Central Bank, was sound again about the latest surge of the euro, after setting a 15-month high against the dollar earlier this month, saying the euros exchange rate is critical for growth and inflation.
Speaking at a Hearing before the parliament of the European Union, Draghi dismissed the talks of the so-called currency war - a debate which broke out about how Japans aggressive monetary policy may influence the value of the yen.
Measures announced by Japan which are expected to devalue the yen fueled concerns of a possible second 21st century competitive devolution, not between China and the United States over the value of yuan, but Japan and the euro zone!
However, fears of a new outbreak of currency war was partially contained after the statements from G-7 and G-20 groups of nations as well as the ECB President made commitments to stave off competitive devaluation.
Draghis statement hinted that the ECB may take action if the euro continue to strengthen, a call that saw the currency slide from its multi-month rally sparked by the Banks loosened monetary policies aimed at boosting the economy.
The economy is still much in recession and recently data saw the euro zones Gross Domestic Product registering its worst quarterly performance in 2012, with a sharper contraction rate of 0.6 percent in the final three months of 2012.
GDP numbers affirm ongoing weakness in the 17-nation economy despite the last Jump in sentiment, whereas the first row of confidence indicators will provide new evidence of whether the ECB will enact additional monetary easing.
Meanwhile, a busy calendar of euro zones releases today will include German Zew and Ifo business sentiment surveys. This week, the economic releases will include euro area purchasing managers indexes and revised fourth-quarter German GDP.
Further positivity in the euro areas sentiment indicators will surely offer more support for investors, with hopes running high for Germany to take the economic wheel amid signs of business improvement, hopefully to be reflected today.