Euro Strengthens On ECB Remarks

By Roger Baettig | February 20 2013 9:27 AM

The euro climbed on Wednesday morning following positive statements from a European Central Bank official. The commodity traded at 1.3424 at 7:47 GMT on Wednesday.

REUTERS

A sculpture showing the euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt, August 18, 2010.

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ECB Executive Board member Joerg Asmussen told reporters that he was predicting gradual improvement within the eurozone during the first quarter of 2013. According to Reuters, Asmussen said the board is focused on fiscal consolidation, structural reforms and banks' balance sheet repair.

After poor data from the fourth quarter shook confidence in the region, many are wondering whether or not the ECB will intervene and cut interest rates in March. The head of the Bank of France and member of the ECB's Governing Council, Christian Noyer, remarked that an interest rate cut may only impact core countries like Germany, and in that case, it would not be considered by the bank.

Optimism from ECB members was underpinned by a Greek anti-austerity strike planned for Wednesday. The nationwide strike is expected to disrupt transportation, public schools, tax offices and even hospitals.

The nearly bankrupt nation is facing the implementation of several austerity cuts, which the country's labor unions are fighting against. Since 2009, Greece has been subjected to a series of difficult cuts as the government tried to dig its way out of debt. However, the cuts have been poorly received by Greeks, who have repeatedly organized strikes and rallies to protest.

In the past, strikes have ground the country to a halt and caused food shortages due to a lack of transportation. Recently, demonstrations like Wednesday's have been gaining momentum throughout the country, highlighting the region's battle with poverty and unemployment.