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 currency`s 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 euro`s 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 Japan`s 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.
Draghi`s 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 Bank`s loosened monetary policies aimed at boosting the economy.
The economy is still much in recession and recently data saw the euro zone`s 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 zone`s 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 area`s 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.
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