The shared currency at the time of writing is trading at 1.67 against the US dollar, regressing to where it was a year ago, as the euro comes into its second week of losses.
The European Central Bank’s governing council are set to meet on Thursday in Frankfurt for talks on its monetary policies, with critics expressing concerns over whether they will step in and tackle the issue surrounding the falling euro.
Officials are set to discuss key interest rates in the EU, in a bid to maintain price stability across the eurozone.
According to the ECB’s Governing Council, price stability is a “year-on-year increase of in the Harmonised Index of Consumer Prices (HICP) in the eurozone area below 2 percent”.
The HICP is used to compare inflation rates across the EU, and has been used by the European Central Bank since 1999 to ensure stable price rates in all eurozone countries.
Speaking about whether the European Central Bank will step in and rescue the euro, Timothy Grad, head of EMEA macro strategy at State Street Bank & Trust Co. told Bloomberg: “You do have a decent growth profile, but you have a central bank that will be very deliberate and not offer you a lot to get excited about on the rate front, at least for six months or so.”
Analysts expected the euro to end at a $1.1800 for year, but because of recent drops in rates, experts are predicting the currency to decrease to $1.2600.
On Monday, the euro traded at $1.1700, following a progressive three-year high in February.
In May, the euro hit a massive slip against US dollar, hitting its lowest level in 2018.
Two weeks ago, Mr Draghi announced plans to end its massive bond-buying programme, which saw the ECB purchase £26.76billion (€30 billion) of government and private debt, after interest rates reached a record low.
Officials have now declared borrowing with be reduced to €15billion for the last three months of 2018.
The ECB said in a statement this month: “The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary.
The quantitative easing programme that once helped the eurozone countries borrow money at low rates, was used to help return inflation rates close to the set 2 percent rate.
Now, it seems certain that the QE will not be expanded.
However, Mr Draghi said the currency union’s economy still needed “significant monetary stimulus” to hit its inflation target of close to 2 per cent and stressed the bank’s decision to end bond purchases in December was “subject to incoming data confirming our medium-term inflation outlook”.