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Posted January 17th, 2014 by Charles Purdy

Euro steady as we wait for the ECB’s next move

The euro has had a quiet week, seeing little in the way of notable movements against key trading partners. Against sterling we have seen the euro strengthen slightly and rates hover on or around the 1.2 mark for most of the week with mixed data failing to force a movement one way or the other. Meanwhile, the single currency traded within a similarly narrow range against the US dollar for the early part of the week before weakening moderately towards the end, partly in response to slowing German growth figures. It was revealed on Wednesday that Europe’s largest economy grew by 0.4% in 2013, which was marginally lower than median predictions. Data on the whole was mixed and not overly influential. Tuesday saw Industrial Production figures for the Eurozone revealing marginally higher than expected growth at 1.8%, while Eurozone inflation data – in the form of Consumer Price Index figures – came out as expected at 0.8%. Low levels of inflation are still a major concern for the Eurozone and any anomalous data indicators relating to current levels are likely to have an impact on euro crosses. Looking ahead to today, the German Constitutional Court ruling on the legality of the European Central Bank (ECB)’s Outright Monetary Transactions Policy (OMT) may have a bearing on performance; there are no other data releases today that are likely to be influential. Call your trader now to take stock of this week’s movements.

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Posted January 16th, 2014 by Charles Purdy

Euro continues steady start to the year

The Euro started yesterday in a slow fashion on the back of average German growth figures. Europe’s biggest economy posted a growth of 0.4% in 2013, slightly less than the 0.5% that was expected by most, and less than 2012’s growth figure of 0.7%. While this figure may have seemed disappointing to some, it is expected that the German economy will have a more positive year, pushing growth well above 1%. All in all, the euro has started off 2014 in a steady fashion. Positives for the eurozone include the European Central Bank (ECB)’s shrinking balance sheet and indications that the crisis seems to be all but over, whereas negatives include prevailing high unemployment, low inflation and worries over bank and government debt.

Posted January 15th, 2014 by Charles Purdy

Eurozone production data supports the euro

The euro saw little in the way of decisive movement yesterday in the absence of any data of great influence. The only figures of note emanating from the eighteen-nation bloc were the monthly Industrial Production figures for the Eurozone, which indicated a 1.8% increase in the region. These were marginally better than expected, although they did not affect performance in any significant way as the euro remained largely static against the US dollar and weakened slightly against sterling. Looking ahead to today, there is once again little in the way of influential data set to be released. We can expect Trade Balance data through from the Eurozone, which indicates the difference in value between imported and exported goods and services, however effects are generally limited due to the earlier release of the same data sets for Germany and France.

Posted January 14th, 2014 by Charles Purdy

Euro benefits from bad news elsewhere

Yesterday was a mixed day for the single currency as it strengthened against sterling, but lost some ground against the US dollar. Despite a relatively quiet day for Eurozone data, the eighteen-nation currency managed to perform well against a weakening sterling, notably pushing below the 1.20 mark for the first time in 2 weeks. The only real data of note from the Eurozone was Italian Industrial Production data, which came out showing less growth than was expected from the sector. Looking ahead to today, Industrial Production figures for the Eurozone have greater potential to impact upon performance, however it is likely that events outside the eighteen-nation bloc will play a greater role ahead of the German Constitutional Court decision on Friday.

Posted January 13th, 2014 by Charles Purdy

Euro holds steady on better than expected data

The euro ended the week on a strong note as French Industrial Production data came out better than expected and investor confidence in the eighteen-nation bloc continued to improve. Friday saw the single currency strengthen sharply against sterling and the US dollar. Looking ahead to this week, the German Constitutional Court is due to deliver its ruling on Friday concerning the legality of The European Central Bank’s (ECB) Outright Monetary Transactions policy. ECB President Mario Draghi’s bailout plan would be unworkable if Europe’s largest economy deems it unlawful. Ahead of this, Eurozone Industrial Production data for November is due out on Tuesday and could have a bearing on performance as it is expected to show improving growth.

Posted January 10th, 2014 by Charles Purdy

Possibility of further interest rate cuts undermines the euro

Eurozone data has been mixed this week and failed to have a decisive impact on the performance of the single currency before Thursday. Tuesday’s German unemployment data was better than expected and revealed a reduction of 15,000 in the number of people not in employment. This positive influence was counterbalanced by the slightly lower-than-expected Eurozone Consumer Price Index data which showed that whilst confidence is justifiably building in Europe’s largest economy, the Eurozone as a whole is not out of the woods yet as regards the possibility of deflation and further interest rate cuts. Fears of this nature influenced European Central Bank (ECB) President Mario Draghi’s statement yesterday in which he re-asserted the Central Bank’s intention to keep interest rates at record lows for an extended period of time.

Posted January 9th, 2014 by Charles Purdy

The euro weakens despite better than expected data

The Eurozone unemployment rate for November came out as expected yesterday as it held steady at 12.1%, the same rate as in the previous month, although still an increase on the 11.8% seen in November 2012. German Factory Orders showed significant growth as did Eurozone retail figures, however this did not translate into any real appreciation of note for the single currency in a day that saw a strong performance from sterling and the US dollar. A week of mixed data so far has prevented the euro from seeing any decisive movements in key pairings, however this could change today as the European Central Bank (ECB) reveals its interest rate decision before holding the customary press conference.

Posted January 8th, 2014 by Charles Purdy

Wednesday is a busy day for Eurozone data

The euro once again failed to see significant movements against its major peers yesterday as data releases were of mixed fortunes. German unemployment data was better than expected and revealed a reduction of 15,000 in the number of people not in employment. This positive influence was counterbalanced by the slightly lower-than-expected Eurozone Consumer Price Index data which showed that whilst confidence is justifiably building in Europe’s largest economy, the Eurozone as a whole is not out of the woods yet as regards the possibility of deflation and further interest rate cuts. Further data from Germany today in the form of the Trade Balance and monthly Factory Orders figures, both of which have relatively strong links to single currency strength.

Posted January 7th, 2014 by Charles Purdy

Euro performance continues to be uninspiring

A day of mixed data from the Eurozone made for a mediocre performance from the single currency yesterday. However, some ground was made in major pairings as sterling and the US dollar performed poorly. In the eighteen-nation bloc, Spanish Services data detailed more growth in the troubled state than was predicted, whilst Services figures from Italy revealed contraction. Euro-driven volatility is a possibility today as the Eurozone Consumer Price Index is to be released this morning. Last month’s results impacted positively on the single currency as they indicated higher levels of inflation than were expected. This result allayed investor fears concerning further reductions in Eurozone interest rates and similar figures could spur further euro appreciation.

Posted January 6th, 2014 by Charles Purdy

Will the euro continue to weaken this week?

A bad day for the euro again on Friday, falling against the majority of its 16 major trading partners. This drop came in spite of Spanish unemployment figures coming out much better than forecast, dropping by 107,600 in December (the biggest reduction on record) and 147,400 for the whole of 2013, as the International Monetary Fund (IMF) warned that the country still faces unemployment rates of above 25% for a further five years. Outside of this it was quiet on the data front across the Eurozone. Today we have German preliminary inflation data along with Spanish, Italian and Eurozone wide services Purchasing Manager Index figures.

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