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Posted February 14th, 2014 by Charles Purdy

Eurozone still worried by poor economic data

The euro had a fairly uneventful week until Wednesday, with figures showing a greater than anticipated fall in industrial production for the Eurozone in December. The 0.7% decline in output, combined with reports from a board member of the European Central Bank (ECB) that the ECB are seriously considering negative interest rates, triggered a significant fall against the pound, the latter being boosted by positive growth figures on Wednesday.
Yesterday saw a slight rallying for the euro against sterling and a strengthening against the US dollar but with German and Eurozone growth figures due for release today we could see further significant movement for the Eurozone currency before the week ends.

Wondering whether to buy or sell euros? Contact your trader now for live rates, updates and guidance.

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Posted February 13th, 2014 by Charles Purdy

Eurozone data disappoints

Yesterday was a much more volatile day across the currency markets and the euro weakened sharply across a number of major pairings. Industrial Production in the Eurozone fell at a greater rate than expected during the last month of 2013, with yesterday’s figures revealing a fall in output of 0.7%. This, along with reports from a board member of the European Central Bank (ECB) that the ECB are seriously considering negative interest rates, caused the single currency to weaken sharply against the US dollar. Euro depreciation against sterling was more pronounced as the influences above in conjunction with the effect of the Bank of England Inflation Report caused a considerable shift.

Posted February 12th, 2014 by Charles Purdy

Eurozone still vigilant on deflation

Euro stayed relatively range-bound yesterday from a lack of any significant data release, although it gained some strength against the US dollar caused by a general fall in the strength of the dollar. A European Central Bank (ECB) council member stated that if the Eurozone inflation outlook weakens they may look to consider negative interest rates. However, he did make clear that the ECB bases their decisions ‘on the most recent data and careful preparation’. He also noted that there has been ‘no signs of deflation in the euro area’ and that the Eurozone has remained resistant to the recent struggle of emerging markets.

Posted February 11th, 2014 by Charles Purdy

Disappointing Eurozone data doesn’t undermine the euro

Despite Industrial Production figures from both France and Italy showing more contraction than expected, the euro saw little movement in major pairings yesterday. As volatility across the currency markets reached its lowest point for two weeks, the single currency traded within a relatively narrow range against sterling and the US dollar.

Very little in the way of influential news is set to be released from the Eurozone today. Investor attention is likely to be drawn elsewhere as the new Chairperson of the US Federal Reserve testifies in Washington DC. Following this, European Central Bank (ECB) President Mario Draghi is set to speak tomorrow and volatility is likely to increase in the run-up to his speech.

Posted February 10th, 2014 by Charles Purdy

Deflation still a worry for the Eurozone and for the Euro

The German Constitutional Court ruling on the legality of the European Central Bank (ECB)’s Outright Monetary Transactions (OMT) policy proved to be something of a damp squib on Friday as authority was effectively deferred to the European Court of Justice (ECJ). The OMT allows the ECB to do – as ECB President Mario Draghi promised – whatever it takes in terms of bond-buying in order to sustain the single currency. The ruling from the Constitutional Court had the potential to have a significant impact on the performance of the eighteen-nation currency, however this was avoided. As it was, Friday proved to be a mixed day for the euro as it lost ground against sterling, but gained against a weaker US dollar during the afternoon.

Posted February 7th, 2014 by Charles Purdy

Euro buoyant as no action taken by the ECB

The euro performed reasonably well for the early part of this week, strengthening steadily against its major peers before appreciating more sharply in the wake of Thursday’s European Central Bank (ECB) press conference. The single currency performed particularly well against sterling, even pushing rates back below the 1.20 level on Thursday afternoon. However, data was perhaps more mixed than performance would suggest, with the services purchasing managers’ index (PMI) figures coming out shy of market estimates while retail sales figures disappointed, showing that trade was down by 1.6% month-on-month.

On Thursday ECB President Mario Draghi refrained from reducing interest rates further or implementing any additional stimulus.

Posted February 6th, 2014 by Charles Purdy

Will the ECB cut interest rates today over worries about deflation

The euro had a volatile day yesterday as its services purchasing managers’ index (PMI) figures came out shy of market estimates, whilst Januarys figures were also revised down. Retail sales figures were also particularly disappointing, showing that trade was down by 1.6% month on month.

The main announcement today will be the monthly European Central Bank (ECB) meeting. With deflation risk a severe ongoing concern in Europe, some analysts believe that the central bank will act at today’s meeting to try and boost liquidity. Speculation continues to mount that the ECB could potentially cut the refinancing rate further or even enforce negative deposit rates, which in theory would weaken the euro.

Posted February 5th, 2014 by Charles Purdy

Eurozone awaits tomorrows ECB meeting and announcement

The euro had a quiet day yesterday, with Spanish unemployment change figures being the only data release of any note. Although this transpired to be worse than forecast it had little impact on the currency as a whole given the already struggling Spanish economy. Eurozone inflation data rose slightly for the month of January, following a drop in December. The outlook for the euro is overall positive, ahead of what will be the closely watched European Central Bank (ECB) press conference held tomorrow, with their rate decision being revealed.

Today we have Spanish and Italian Services purchasing managers’ index (PMI) data being released, along with retail sales figures from the Eurozone.

Posted February 4th, 2014 by Charles Purdy

Euro benefits from news elsewhere

Movements in euro pairings were largely dictated by events elsewhere yesterday as the euro strengthened considerably against sterling and made marginal gains against the US dollar. The major data releases from the Eurozone were mixed with Spanish manufacturing figures revealing more growth than expected and Italian manufacturing figures revealing less growth than expected.

Spanish unemployment data may today have a greater influence on the performance of the single currency; however, it is likely that the fallout from investor bets placed yesterday will continue to play a significant role. Expect continued volatility in the run-up to the European Central Bank (ECB) Minimum Bid rate decision on Thursday and the following press conference.

Posted February 3rd, 2014 by Charles Purdy

Eurozone worries about low inflation, will the ECB cut interest rates?

The euro continued its slide on Friday last week, albeit at a slightly reduced pace. Eurozone consumer price index figures put inflation at a slightly lower rate than expected, contributing to the continued weakening. Inflation indicators are likely to continue to have a strong bearing on the performance of the eighteen-nation currency as the European Central Bank (ECB) remains open to implementing further measures to prevent inflation falling further. It is also worth noting the outcome of the German monthly retail sales data release on Friday morning, which revealed a drop of 2.5% in the value of sales for the final month of 2013.

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