An early morning rebound in both the EUR and Italian bonds were short lived while the BoE preps for additional quantitative easing with its latest inflation report

The EUR was sent to a 6-week low versus the USD after multiple bearish events came one after another. The final straw was a weak bond auction by Germany.

Today will have a significant amount of data on the economic calendar. European PMI data will likely show the euro zone slipping towards a recession. The BoE meeting minutes could hint at additional easing of UK monetary policy. EU industrial data is expected to drop and will cap out the morning which is coming off of a volatile Asian trading session.

This morning’s EUR/USD price action looks like a false breakout from the falling wedge pattern on the daily chart.

Today’s data releases from the UK and the US may help higher yielding assets receive a bid following yesterday’s coordinated central bank move and a reduced Chinese reserve requirement.

The EUR sunk to its lowest level since early October following comments by both Moody’s and Fitch. The rating agencies criticized last week’s EU economic summit which fell short of a solution to the current fiscal problems. There is a risk of additional sovereign credit downgrades before the end of the year which would weigh on market sentiment and the EUR.