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Posted February 28th, 2014 by Charles Purdy

The euro under pressure after inflation data – more released today

The euro experienced some weakening against the US dollar and sterling this week, although both rates have remained within a relatively narrow range. The euro’s slightly poorer performance was initiated by unimpressive inflation figures released at the beginning of the week. The European Central Bank (ECB) has come under a degree of pressure to combat low inflation and indeed the threat of deflation; this may result in further interest rate reductions when the ECB meets next week – a move that would cause the single currency to weaken sharply.

This pressure was further justified by the European Commission Economic Forecasts, which put Eurozone inflation based on consumer prices at 1% for 2014 – a significant reduction from November’s estimate of 1.5%, and dangerously below the European Central Bank (ECB)’s 2% target.

The euro has the potential to go up or down in a significant fashion today as more key inflation data will be released in the morning. Additionally, the monthly Eurozone unemployment figures could add to aggregated movement in the markets if the figures differ from last month’s release detailing an unemployment rate of 12%, as economic data like unemployment figures contribute to sentiment over the strength of the economy and the strength of a currency by association.

Wondering when to buy or sell euro? Get in touch with your trader for live rates, updates and currency-buying strategies.

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Posted February 27th, 2014 by Charles Purdy

Today’s German inflation data a worry for the euro

The euro weakened against the US dollar and sterling yesterday afternoon despite an absence of any major data releases from any of the countries that use the common currency. The weakening of euro against sterling was supported by a statement from Bank of England policymaker Ben Broadbent. He observed that sterling’s current position against other currencies reflected the current strength of the UK economy. This gave investors confidence that the central bank is happy with a stronger pound and is not currently considering any policy changes that would affect this drastically. Sterling’s gain is euro’s loss as the news led the already troubled euro to weaken further..

Posted February 26th, 2014 by Charles Purdy

Eurozone inflation forecasts fall

The euro experienced more limited movement in the absence of any overly influential data. European Commission Economic Forecasts put Eurozone inflation based on consumer prices at 1% for 2014, which is a significant reduction November’s estimate of 1.5%, and dangerously below the European Central Bank (ECB)’s 2% target. Whilst this aspect of the forecast certainly does not bode well for the single currency, its effect on the performance of the euro throughout the day was not significant given that low inflation in the Eurozone is already a recognised problem.

Looking to today’s events, it is this morning’s German Consumer Confidence data that is the most notable release from the Eurozone.

Posted February 25th, 2014 by Charles Purdy

Eurozone inflation data increases worries over deflation

The single currency started the week by seeing depreciation in a number of major pairings. The euro’s slightly poorer performance was caused by unimpressive Consumer Price Index (CPI) figures and subsequent comments and speculation. A measure of the change in prices of goods and services purchased by consumers in the Eurozone, the CPI is a key indicator of overall inflation and low figures – such as the 0.8% published yesterday – and is contributing to mounting pressure on the European Central Bank (ECB) to act as worries over Eurozone deflation increase.

Conversely, better-than-expected German Business Climate data played a role in limiting single currency losses.

Posted February 24th, 2014 by Charles Purdy

Potential euro volatility this week

No major data was released from the Eurozone on Friday although the euro did enjoy some appreciation during the afternoon as a result of trading activity. There is potential for volatility from the start of this week, in a week with lots of Eurozone data releases, as German Business Climate data is set to be released this morning. Results have been showing increasing optimism for the past three months and the trend is expected to continue today. Any stark deviations in results from expectations will likely cause movements in the euro.

Data releases are more limited mid-week. However, the more important Eurozone Flash inflation figures for February are due out on Thursday and may inspire sharper movements in the euro as the European Central Bank is focused on avoiding deflation at all costs and there is a worry, if these figures show a further fall in inflation, that the ECB will reduce interest rates next week.

Posted February 21st, 2014 by Charles Purdy

Eurozone data disappoints but the euro holds on

Euro movements were relatively limited during the earlier parts of the week despite German Economic Sentiment data coming through markedly worse than expected on Tuesday. Poor economic data from France and Germany contributed to the single currency performing poorly against major peers yesterday, with manufacturing figures from both states worse than expected, as was Services data from France. These figures are important indicators of how well Eurozone nations are recovering and as such caused the euro to weaken against sterling, albeit briefly, and the US dollar.

There is little due out in the way of influential news today, although the G20 talks over the weekend have the potential to play a role in how the euro is traded, given the profile of the event and nature of discussions.

Posted February 20th, 2014 by Charles Purdy

Will key Eurozone data released today affect the euro?

Movements in the euro were relatively limited yesterday in the absence of any influential data releases. It was perhaps interesting to note that the Greek Current Account figures released revealed a surplus for the first time since the data started being recorded. This is certainly an encouraging sign for the Southern European nations that have long struggled to move towards economic recovery and positive trade balances.

Today’s events provide increased potential for single currency volatility as German and French Flash Manufacturing data are released. Both figures are expected to show slight improvements from the previous month, with French Manufacturing figures looking at a narrow contraction and the German sector moving towards consistent growth.

Posted February 19th, 2014 by Charles Purdy

Euro gains ground

The euro strengthened against the pound yesterday despite lower-than-forecast economic sentiment figures from the German ZEW Survey. This was largely due to the UK’s low inflation figure of 1.9%, which makes an interest rate increase for the UK less likely in the near future.

With no significant European data due to be released today, the only likely cause for any significant shift in for sterling-euro will be UK data releases planned for today.

Wondering when to buy or sell euros? Call your trader now for live rates, guidance and currency-buying strategies.

Posted February 18th, 2014 by Charles Purdy

Eurozone still worried about negative interest rates

The single currency started the week in a relatively uneventful fashion yesterday as it remained relatively static against the US dollar and made some ground against sterling. Uncertainty still reigns over whether or not the European Central Bank (ECB) will act in response to low inflation in the Eurozone, and speculation is likely to continue to play a role as we approach the next ECB monthly meeting on 6 March.

The most influential data release today is likely to be German Economic Sentiment data, which is due at 10am. Other than this, Eurozone Current Account figures are due out in the morning and Ecofin meetings, in which European Finance Ministers discuss the fiscal policies of the 28 member states, are taking place throughout the day.

Posted February 17th, 2014 by Charles Purdy

Euro under pressure, will this week’s data bring support?

Some mildly better-than-expected data from the Eurozone on Friday morning helped the single currency see some appreciation against its peers, although movements were generally more limited than those we saw on Thursday. The euro made slight gains against the US dollar and Japanese Yen, but lost some ground against a strong sterling. French Preliminary Non-Farm Payrolls were marginally better than expected, showing a slight increase in the number of employed persons outside of the farming sector. Additionally, German and French preliminary GDP data sets helped to improve performance with positive outcomes of 0.4% and 0.3% respectively.

The first influential figures through this week are set to be German Economic Sentiment figures, due on Tuesday.

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