EURUSD was on track for its fifth week of losses. The pair has tumbled 2.4 percent this quarter to trade around 1.3360 as of 12:02 PM Tokyo time. The pair could slide to $1.32 by year-end according to studies.
EURUSD could slide to a one-year low of 1.30 as German bond yields dropped to records after the economy shrank at twice the pace analysts forecast.
Data this month have showed growth in the euro zone stalled in the second quarter, with Germany suffering a surprise contraction. At the same time, inflation in the region was confirmed to have slowed to levels not seen since the height of the financial crisis nearly five years ago, leaving deflation a very real threat.
The Fed is on schedule to end its bond-purchase program this year and futures price an 84 percent chance it will increase its key rate by the end of 2015. ECB President Mario Draghi unveiled an historic stimulus package in June and has said he is willing to do more if the central bank’s inflation outlook changes.
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