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Posted January 31st, 2014 by Charles Purdy

Eurozone inflation data undermines the euro

The euro had a relatively uneventful start to the week and traded within a narrow range against major peers before more notable weakening was seen on Thursday. Thursday’s data releases displayed mixed fortunes against the backdrop of the initial meeting of the European Central Bank (ECB)’s Supervisory Board; this inaugural meeting represents an important step towards the creation of a monetary union in the Eurozone.

In terms of figures, German Consumer Price Indicator data came through slightly weaker than expected; this is likely to have been a reasonable contributor to Thursday’s euro depreciation given the ECB Governing Council’s warning that action would be taken if inflation in the eighteen-nation bloc continues to slow.

A number of data sets are due out today and are likely to determine whether the euro will slip further against its major peers or make a recovery. A Eurozone flash Consumer Price Index estimate and unemployment rate figure are due out in the morning alongside Retail Sales data from Germany and Consumer Spending data from France.

Thinking of buying or selling euro? Businesses dealing with euro currency exchanges will have a lot of watch out for, so contact your trader for the best ways to minimise your currency exchange costs.

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Posted January 30th, 2014 by Charles Purdy

Will today’s Eurozone data boost the euro?

Aside from a short period of euro appreciation during late morning – that was quickly reversed – yesterday was again a day of limited movements in euro pairings. Money supply data was revealed to be worse than expected, detailing a 1% increase; however, this was not a large enough discrepancy to have any notable effect on the strength of the single currency.

Today will provide a greater array of data from the Eurozone, with unemployment data and Consumer Price Index figures from Germany having the potential to contribute volatility to the trading day. Additionally, Spanish quarterly flash GDP figures will give some indication as to how effectively the Southern European nation is making a recovery.

Posted January 29th, 2014 by Charles Purdy

The Euro has a quiet day

There was a lull in Eurozone news yesterday as little emerged from the eighteen-nation bloc in terms of data releases or influential policy developments. The single currency traded within a relatively narrow range against both sterling and the US dollar throughout the day.

Today could see similar movements for the euro unless the Money Supply figures see some divergence from expectations. These figures detail the volume of domestic currency in circulation within the Eurozone and are expected to detail an increase of 1.5%. The data set is positively correlated with interest rates and therefore higher-than-expected data will have a positive impact on euro performance.

Posted January 28th, 2014 by Charles Purdy

Interest rate worries undermine the euro

German Business Climate data failed to have any significant effect on the performance of the single currency yesterday as figures were only marginally better than expected. The euro weakened against sterling during the morning, causing the rate to move back towards the highs seen last week, whilst fluctuations were more limited against the US dollar.

The European Central Bank (ECB) still remains under pressure as interest rates in the Eurozone remain volatile. ECB President Mario Draghi stated last week that further policy decisions would be taken should interest rates keep climbing above the Central Bank’s 0.25% benchmark. Further interest rate reductions or a further loosening of monetary policy would have a negative impact on euro strength so the discussions at the next ECB meeting on 6th February are likely to be a cause of volatility.

Posted January 27th, 2014 by Charles Purdy

Is the Eurozone really growing?

After a buoyant Thursday, Friday was a quieter day for the euro. Belgian Business Climate data was marginally more pessimistic than expected and European Central Bank (ECB) president Mario Draghi made an address in the evening, which affected the euro somewhat; however, any fluctuations paled into insignificance compared to the advances made on Thursday.

A greater volume of data is expected from the Eurozone in the week ahead and further volatility is likely. The first notable release of the week comes this morning in the form of German Business Climate data, which has been detailing consistent increases in sentiment over recent months.

Posted January 24th, 2014 by Charles Purdy

Eurozone economic data surprises to the upside

The euro has stayed out of the limelight for the most part of this week as limited and mixed data releases have failed to have a notable influence on its performance. However, this proved to be the quiet before the storm when the euro bucked the trend on Thursday. The single currency appreciated sharply against its major peers in response to a host of data releases that exceeded expectations. Both French and German Manufacturing figures were better than expected, with the pace of growth really picking up in Germany, Europe’s largest economy, and levels of contraction falling in the French manufacturing sector.

Posted January 23rd, 2014 by Charles Purdy

Euro suffers on UK’s positive employment data

Yesterday provided little to shout about in terms of influences from the Eurozone as events in the UK took centre stage, as expected. Consequently, the single currency was pushed to an even weaker position against sterling resulting in the sterling-euro rate edging above 1.22 for the first time in over a year. Continuing with the trend for this week, yesterday saw the euro fluctuate within a relatively narrow range against the US dollar. One piece of positive news was the Spanish government raise €10 billion on the debt markets at reasonable interest rates and that the offering was four times oversubscribed.

Posted January 22nd, 2014 by Charles Purdy

Eurozone data lacks influence

Despite euro movements remaining limited yesterday, we did see the single currency depreciate to its weakest point since January 2013 against a resurgent sterling. Meanwhile, the euro saw a degree of volatility against its US counterpart throughout the day, but net movements were negligible.

The two notable events of the day for the Eurozone failed to have a notable effect due, it seemed, to their contrasting influences. While both sets of Economic Sentiment data indicated optimism in their respective regions, the data for Germany revealed a more downbeat picture, whereas figures for the Eurozone as a whole were better than expected.

Posted January 21st, 2014 by Charles Purdy

Euro has a steady day

In a quiet day for data across the board, movements in the euro were limited. It appreciated slightly against sterling and the US dollar, but no sharp rate movements were seen. German Producer Price Index – a key indicator of inflation, detailing the change in price of manufactured goods – came in marginally lower than expected, but failed to have a notable effect.

Looking ahead to today, Eurozone data releases include the German ZEW Economic Sentiment index, which is expected to show rising optimism in Europe’s largest economy, and Spanish quarterly House Price Index figures. However, euro fortunes this week are likely to be more closely tied to Wednesday’s flash Manufacturing data releases and the preceding speculation.

Posted January 20th, 2014 by Charles Purdy

Will we see indications of Eurozone recovery this week?

The euro fell significantly against sterling on Friday following strong consumer data from the UK, but faced little change in relation to the US dollar after official data confirmed a low monthly inflation figure of 0.8%. Fears of deflation contribute towards a weakened euro, but this will increase its export competitiveness.

This week a number of significant data releases will give further indications as to the success of Eurozone recovery. This morning will see the announcement of German PPI figures and tomorrow the monthly report from the Centre for European Economic Research will give an indication of economic sentiment for Germany.

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