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Posted September 30th, 2014 by Charles Purdy

Eurozone inflation data the key release for today

Monthly inflation data out of Germany, Europe’s most influential economy, gave some respite to the euro yesterday. The figures came in at a flat 0%, marginally better than the -0.1% that most forecasters were predicting. European Central Bank (ECB) President Mario Draghi had stressed the importance of avoiding negative inflation rates for the Eurozone, so the figures provided a glimmer of hope. This morning’s year-on-year figures for the whole bloc will also be watched closely in the market.

We may see the euro relatively range-bound over the next few days ahead of Thursday’s ECB press conference, as traders will be looking for clues as to Draghi’s medium-term strategy. He has made no secret over the last few conferences that he welcomes a weaker currency for the bloc, seeing it as a way of turning around its ailing economies by reducing the relative cost of exports. However, given that the euro has fallen by nearly 10% against its two most-traded peers, the US dollar and the British pound, Draghi will be forced at some point to accept that enough is enough in order to avoid a euro in free-fall. Other data to keep an eye on are German retail sales, as well as monthly unemployment figures for the whole bloc.

If you are looking to buy or sell euros, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.

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Posted September 29th, 2014 by Charles Purdy

Euro and Eurozone under pressure, will the ECB help?

The euro had a relatively quiet day Friday, fresh from hitting peaks against sterling on Thursday not seen since July 2012. In the morning we saw slightly weaker-than-expected German consumer spending figures, but these did not result in much movement against sterling. However, the euro struggled against the US dollar, hitting fresh twenty two month lows. Highlights from the European Central Bank (ECB) press conference on Thursday were weaker-than-expected economic conditions and the possibility of quantitative easing, which were the driving factors in the euro slump.

This Thursday we will find out if the ECB is serious about boosting the Eurozone economy through the use of quantitative easing as the spotlight will be on the ECB’s interest rate decision and the following conference.

Posted September 26th, 2014 by Charles Purdy

Euro slipping away

After starting on fairly stable footing, trading in quite a narrow range against sterling and the US dollar, the euro’s week took a turn for the worse on Wednesday. Business climate figures released from Germany, the bloc’s most influential member, came in well below forecasted and even further below the previous figures. As an immediate result, we saw the currency fall against the majority of its most-traded peers, and below 1.28 against the US dollar for the first time in 14 months.

On top of this, Wednesday also saw Barclays lower their 12-month forecast for the euro-US dollar pairing significantly from 1.25 to 1.10, indicating just how pessimistic sentiment is amongst some traders.

Posted September 25th, 2014 by Charles Purdy

Poor data put the Euro under pressure

The euro had a tough time yesterday, dropping below 1.28 against the US dollar for the first time in 14 months as German business confidence figures came in below forecast. The single currency dropped off against the majority of its 31 most-traded peers, with speculation in the market growing that European Central Bank (ECB) President Mario Draghi will look to further stimulus measures over the coming months. To add insult to injury, Barclays aggressively lowered their 12-month forecast for the euro-US dollar pairing from 1.25 to 1.10 – indicating how negative sentiment is amongst traders and further pushing down the value of the currency.

Posted September 24th, 2014 by Charles Purdy

Euro just about steady

The euro had a fairly quiet day yesterday, with the only significant movement against the US dollar. The gains against the dollar came about mostly as a result of dollar weakness, although the single currency did take some strength from German service industry figures, which came in over forecast, at a figure of 54 –anything over 50 shows industry expansion. Against sterling, the euro gained throughout the morning following the German figures, but sterling then staged a recovery as the afternoon went on, closing at about the same level at which it opened.

Looking forward to today, we have German monthly economic health figures.

Posted September 23rd, 2014 by Charles Purdy

ECB Chairman highlights deflation as his main worry

Yesterday afternoon saw a speech from the President of the European Central Bank (ECB), Mario Draghi, in which he outlined plans for medium-term monetary policy. Markets were not impacted too significantly, as much of the content of the speech was widely expected. Draghi maintained his position that the threat of deflation across the bloc remains his primary concern, and that, should we see the situation worsen, he will resort to stimulus measures in the form of asset-backed security purchases. As a result, expect future inflation data to be closely scrutinised by traders, as any announcement of stimulus measure will likely further weaken the euro.

Posted September 22nd, 2014 by Charles Purdy

ECB policies will put the euro under pressure

Following the results of the Scottish vote on independence on Friday we saw the euro eliminate all gains it had achieved the previous week, dropping back to two-year lows against sterling and 14-month lows against the US dollar. The outlook seems increasingly bleak now for the single currency, as its two most significant peers look to be strengthening further.

Against sterling, the medium-term upside is difficult to predict, but a few forecasters are suggesting we could push through 1.30 before 2015. Eyes will be on this afternoon’s speech from European Central Bank Governor (ECB) Mario Draghi. Traders will be looking for hints from Draghi surrounding any plans for quantitative easing, with bonds and asset-back securities purchases rumoured, given the poor uptake by the banks of the ECB’s cheap loans last week.

Posted September 19th, 2014 by Charles Purdy

Euro suffers heavy losses against sterling

The euro started off relatively flat at the start of the week but suffered heavy losses against sterling following the Scots decision to reject independence.

There was some data released with German Economic Sentiment figures coming in above forecast whilst the European Central Bank put a large emphasis on the significance of waning inflation levels across the bloc. The yearly Eurozone inflation figure of 0.4% was released on Wednesday afternoon and, although still worryingly low, came in above the forecasted figure of 0.3%, which provided some respite. However, the market’s reaction to this data was relatively muted with the weeks focus on the Scottish referendum for independence (which came out overnight).

Posted September 18th, 2014 by Charles Purdy

Euro losing ground

With the European Central Bank (ECB) putting such emphasis on the significance of waning inflation levels across the bloc, yesterday’s figures provided a glimmer of positivity. The yearly Eurozone inflation figure of 0.4% was released in the afternoon and, although still worryingly low, came in above the forecasted figure of 0.3%. This provided a period of short respite for the single currency which lost ground late in the day following the announcement from the US Federal Reserve on interest rates hitting 14-month lows.

Little key news from the Eurozone today but expect a lot more volatility on the sterling-euro cross over the next 24 hours, with all eyes on the Scottish referendum vote in the UK.

Posted September 17th, 2014 by Charles Purdy

How close is the Eurozone to deflation?

The euro was again relatively range-bound yesterday. It saw some strength in the morning as German Economic Sentiment figures came in above forecast, but the impact of this on the market was relatively muted as the figures were still well below the previous month’s results. We saw little movement for the euro against the US dollar, most likely as traders are unwilling to take any bold positions ahead of this evenings announcement from the US Federal Reserve. Against sterling, the euro remained flat throughout the day, until the evening when sterling strength meant the euro lost nearly half a cent.

Looking forward to today, yearly inflation figures for the European bloc will be watched closely.

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