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Posted October 17th, 2014 by Charles Purdy

Despite poor data the euro has a good week

An unremarkable start to the week for the euro yesterday saw it hold flat around 1.27 against the US dollar on Monday and Tuesday, but make up some ground against a relatively weak sterling. Wednesday was an interesting day, with the euro showing resilience to a combination of factors that we would normally expect to weigh significantly on the single currency. Industrial production growth figures for the region showed a contraction, coming in at -1.8% which was below forecast and almost 3% down on the previous month’s release. This was followed by German economic sentiment data which, following a run of worrying data from the Eurozone’s talismanic economy, was not expected to come in anywhere near last month’s result of 6.9 (anything above 0.0 illustrates positive sentiment). However, few had forecast it to come in as low as it did at a worrying -3.6.

Thursday was a relatively quiet day for the Eurozone data-wise, but it saw the single currency lose some of the strength it gained on Wednesday. Final inflation figures out in the morning saw an expected 0.3% rise with a better-than-expected trade balance. The spotlight is still on how the European Union (EU) will recover from their latest setback, with the EU’s powerhouse Germany, along with France and Italy suffering from recent poor data releases. With Interest rate hikes out of the question and the sign-off for their asset purchasing programme imminent, focus will be on how the Eurozone will recover in the final quarter of 2014 and moving into 2015.

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 October 16th, 2014 by Charles Purdy

Euro benefits from poor data elsewhere

The euro had an unusual day today against the US dollar as it had a two-cent swing within 2 hours in the middle of the day. Short-term downside risk has become unlikely against the dollar given the re-forecasts from the Federal Reserve to hold off raising interest rates by a few months. The downside risk still remains in the long term as the uncertainty surrounding the economy is becoming a greater concern following Germany’s decline across the board against several indicators.

The next big piece of data for the Eurozone is inflation data which is out today. This has been forecast to remain at 0.3% throughout September.

Posted October 15th, 2014 by Charles Purdy

Euro slightly less ugly than sterling

The euro lost out against the majority of its peers yesterday, bar a very weak sterling, with a combination of factors weighing on the 18-nation currency. Industrial production figures for the region showed a contraction, coming in at -1.8% which was below forecast and almost 3% down on the previous month’s release.

This was followed by German economic sentiment data, which, following a run of worrying data from the Eurozone’s talismanic economy, was not expected to come in anywhere near last month’s result of 6.9 (anything above 0.0 illustrates positive sentiment). However, few had forecast it to come in as low as it did (a worrying -3.6) and as a result, further pressure was put on the euro.

Posted October 14th, 2014 by Charles Purdy

Euro has a good start to the week

An unremarkable day for the euro yesterday saw it hold flat just below 1.27 against the US dollar, but make up some ground against a relatively weak sterling. The only data release was wholesale inflation data out of Germany, which was bang on forecast of 0.1%.

Today promises to be more interesting, with monthly German economic sentiment figures released this morning. Last month’s figure was 6.9 (anything about 0 illustrates optimism), but with the German economy having shown some very worrying signs over the past month, we can expect today’s figure to be well below that. Monthly industrial production figures from the whole European bloc will also be watched closely this afternoon.

Posted October 13th, 2014 by Charles Purdy

When will the ECB act effectively?

A relatively uneventful week for the euro was concluded in a similar vein on Friday, with the single currency holding relatively flat against its two main peers, sterling and the US dollar. Following on from Thursday’s European Central Bank (ECB) statement, President Mario Draghi was quoted on Friday saying that the ECB remains ‘unanimous in its commitment to using additional and unconventional tools in its mandate’ in an attempt to stimulate some growth into the region and also avoid deflation.

Looking forward to this week, it’s set to be a busy week on data releases. Tomorrow we have industrial production and economic sentiment figures from the region, and on Friday we have the bloc’s monthly inflation level, which will be closely scrutinised.

Posted October 10th, 2014 by Charles Purdy

Euro holding on (just)

A string of poor data releases out of Germany early in the week were absorbed by the euro, which held its ground against the US dollar and the British pound between Monday and Wednesday. Both factory orders and industrial production figures came in below forecast, significantly down on the previous month’s release.

The figures put more pressure on European Central Bank (ECB) President Mario Draghi, to look to stimulus measures to inject some life in the bloc’s collective economy. As a result, eyes were on Draghi yesterday afternoon as he addressed the media, He cited ‘excessively low inflation’ as a major worry, and emphasised the need for structural reforms in the region.

Posted October 9th, 2014 by Charles Purdy

When will the ECB start quantitative easing?

A very quiet day for Eurozone data yesterday meant that the single currency held a fairly flat position against the majority of its peers. This changed with the release of the FOMC minutes from the Federal Reserve in the evening which saw the euro push up through the 1.27 level again.

With no significant Eurozone data, yesterday’s quiet day can probably be attributed to sentiment ahead of today’s speech from the European Central Bank (ECB) President, Mario Draghi. Eyes will be on Draghi come 4pm this afternoon, as traders look for any clues of further quantitative easing or stimulus measures. Added pressure has been put on Draghi as the run of poor data out of Germany, the Eurozone’s flagship economy, has pulled the rug further from under the bloc.

Posted October 8th, 2014 by Charles Purdy

Euro “survives” poor German data

More worrying data from Germany yesterday weighed on the single currency yesterday, with industrial production figures being released in the morning. The figures have not historically carried much sway on the value of the euro, but coming in a significant 5.6% down on the previous month, and off the back of Monday’s poor German data, they were enough for the euro to have a wholly uninspiring morning session. Despite the euro recovering against its main peers, the British pound and the US dollar, the figures further underscored the risk of an economic slowdown.

It puts further pressure on the European Central Bank to widen economic stimulus measures.

Posted October 7th, 2014 by Charles Purdy

Despite disappointing German data, the euro has a good Monday

The only European data release of significance yesterday were German monthly factory orders released early in the morning. Eyes have been on German data over recent weeks, with the talismanic European economy having showing some signs of fatigue with a string of disappointing releases. Yesterday’s factory orders did nothing to buck the trend, coming in below forecast, 10.6% down on the previous month’s figure. Despite this, the euro did somehow gain ground against both sterling and the US dollar, although this trend has started to reverse this morning

It looks set to be a relatively quiet week in terms of both economic data and risk in the Eurozone, but Thursday’s speech from central bank President Mario Draghi could trigger some volatility.

Posted October 6th, 2014 by Charles Purdy

Eurozone data needs to improve if the Euro is the strengthen

After taking some strength on Thursday in response to comments made by European Central Bank (ECB) President Mario Draghi, Friday saw the euro eradicate the majority of its gains. The faltering European economy once again undermined the single currency as services industry figures for the Eurozone came in below forecast, dropping to a 10-month low, with many areas showing quarterly industry contraction. Most worrying were France and Italy, the bloc’s second and third largest economies, which both showed a significant shrinkage.

Today and tomorrow we have German industrial data released which will be very carefully scrutinized in an attempt to gauge the true extent of economic problems in this all powerful state.

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