Forex News- Euro off six-week highs as Germany disagrees on EU Summit draft

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The euro weakened in the US session after some negative comments from German Chancellor Angela Merkel.

The report says that “Germany opposes a phrase in a draft conclusion for Wednesday’s EU summit that calls for the European Central Bank to continue buying bonds in the secondary market”.

Chancellor Angela Merkel said “This sentence is not agreed with us,” adding that Germany did not want a declaration from politicians telling the ECB what to do.

Merkel did not mention whether the ECB would itself make a statement on the issue.

The EU Summit draft mentioned specifically that euro zone leaders will call on the ECB to continue with its “non-standard measures in current exceptional circumstances”.

This according to EU sources, refers to the ECB’s purchase of the bonds from indebted euro zone countries like Italy and Spain.

The euro plunged over 110 pips in the US session, accelerating its fall after rumours surfaced that the EU Summit was cancelled tomorrow. However, it was soon confirmed that the Summit between the 27-European Union leaders will go on as scheduled, however the meeting between European finance ministers (EcoFin) which precedes the Summit, will be cancelled.

The reason is that it is preferred that Eu leaders handle key decisions regarding crisis solutions, as opposed to finance ministers, who are seen as lower than the EU leaders, thereby giving more importance to a crisis plan.

EURUSD fell to as low as 1.3848 from an early session six-week high of 1.3959 but soon rebounded to 1.3910 by 1430GMT.