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Posted January 30th, 2015 by Charles Purdy

Euro, to the surprise of many, holds its own

It has been surprisingly a quiet week for the multi-nation currency, with limited data out this week. Monday saw the start of the ECOFIN meetings, which is a meeting involving the Finance Ministers of the Eurozone. Topics were mainly focused on the Greek election result and Russian sanctions. Greek election results were also released Monday which showed the newly elected Syriza party take power, by forming a coalition with the Greek Independents, another anti-austerity party.

The opening of the Greek elections had resulted in slight weakness for the euro. However, this quickly turned to strength as the newly elected Syriza party confirmed their wish to stay in the euro and Eurozone. Their main aim is to re-negotiate their current austerity measures and package with the International Monetary Fund (IMF) and Eurozone; negotiations started on Thursday.

There were minimal data releases this week. We saw German consumer indication data which showed a slight increase on the previous month. German inflation suffered the same fate as EU inflation, continuing to drop and is now the lowest inflation rate this century for Germany. This can be attributed to the fall in oil prices and food prices, as well as the lack of growth in the Eurozone economy. German unemployment remained a positive figure with a drop in unemployment levels.

Today we will see a few key data releases with German retail sales, French consumer spending and Spanish inflation as well as growth data. The main data release will be the Eurozone initial inflation figure, which is predicted, yet again, to be below the previous month’s.

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 January 29th, 2015 by Charles Purdy

Will German inflation surprise the markets

Just a small amount of data and quiet news from the Eurozone contributed to a slow day for the Euro. The multi-nation currency opened the day with German consumer climate data, a leading indicator of consumer spending. This figure came out just over expectations, but had little effect on the markets. The focus in the Eurozone still remains on Greece, and the possible re-negotiations of their bailout package with the EU and IMF.

Today and tomorrow we have the release of inflation data for the Eurozone which are expected to negative. By how much is the key as the logic behind last week’s programme of Eurozone quantitative easing is to foster growth and higher prices which means the closer these figures are to zero the better.

Posted January 28th, 2015 by Charles Purdy

Euro enjoys a second day in the sun

No data releases on Tuesday for the single currency meant the focus was on Greece and their new anti-austerity coalition. The newly elected Syriza party were just short of the 151 member seats needed for an absolute majority. They confirmed their intentions to form a coalition with another anti-austerity party, the Greek Independents, to take control of the House.

Reports have been circulating that the new Greek finance minister intends to negotiate their current austerity measures and bailout package with the International Monetary Fund (IMF) and Eurozone rather than look for a head-on collision with Eurozone powerhouses like Germany. This seem to give the euro a boost.

Posted January 27th, 2015 by Charles Purdy

The Euro has a “day in the sun”

The euro hit fresh lows on Sunday night as the results of the Greek election became known. Throughout Monday though the euro strengthened as the Greeks reiterated their desire to stay in the Eurozone and it also received a boost from Germany’s IFO business survey, which was positive as expected, moving up to 106.7, up from last month’s figure of 105.5.

However, a positive winning streak for the single currency looks limited with the big news last week around quantitative easing from the European Central Bank (ECB). Further downside risk also seems likely with Greece’s political uncertainty and whether Athens will remain committed to the re-negotiation of the bailout.

Posted January 26th, 2015 by Charles Purdy

Euro in for a tough week

It was another volatile and tough day for the euro on Friday, which saw the single currency continue its slide against the majority of its peers. The euro slid to fresh seven-year highs against sterling and also against the US dollar with lows not seen since September 2003. Data released on Friday morning, in terms of both manufacturing and services Purchasing Managers’ Indices (PMIs) for Germany, France and the Eurozone, was fairly negative on the whole, with only the French manufacturing PMI coming out better than expected. All the figures showed either contraction in their industries or very weak expansion.

And the bad news keeps on coming for the euro with Sundays Greek election resulting in success for the anti-austerity parties.

Posted January 23rd, 2015 by Charles Purdy

Euro keeps on weakening

The rot for the euro started on Wednesday as speculation grew surrounding the likely level of quantitative easing that the European Central Bank (ECB) was expected to announce in their press conference the following day. As it was the speculation was not that far off the reality as the ECB stated that they will pump €60 billion monthly into the Eurozone economy from March this year until September 2016 – meaning that €1.2 trillion will be pumped into the Eurozone to try and stimulate its struggling economy. This weakened the euro further against losses suffered on Wednesday. Draghi also pointed out that inflation for the bloc will remain low for the short term, with this gradually increasing towards the back end of the year.

Posted January 22nd, 2015 by Charles Purdy

The moment of truth for the ECB

We have been seeing two-way movement in the euro in the lead up to today’s European Central Bank’s (ECB) Interest rate and Quantitative Easing (QE) programme decision. Reports yesterday afternoon suggested that the ECB will put forward a €600 billion per annum program of QE to last until the end of 2016, and will look to start buying bonds from March this year.

Interest rates are expected to remain at an all-time low at 0.05%, but the focus will be on the press conference that follows, where we expect them to announce their QE plans. Will it match what was rumoured yesterday, only time will tell, but whatever the announcement is we are likely to experience quite a bit of movement in the euro exchange rate during the course of the today.

Posted January 21st, 2015 by Charles Purdy

No Eurozone news today, will it be a “day of rest” for the Euro

Euro had a quiet and relatively stable Tuesday. Negative German Producer Price Inflation (PPI) – the lowest since August 2009 – moved in the same direction as the Eurozone inflation, while slightly worse-than-expected trade balance figures for Italy looked set to weaken the euro further against its peers. However, positive German economic sentiment (a leading indicator for economic health) – the highest since August 2008 – benefitted the euro.

With no economic data out for the single currency today, investors will look at it for a day’s rest before the European Central Bank (ECB) interest rate decision and press conference on Thursday, where it is deemed highly likely that the ECB will outline their proposed asset purchasing program.

Posted January 20th, 2015 by Charles Purdy

Thursday is this week’s key day for the Euro

It was a quiet day in the markets yesterday in terms of data for the Eurozone. With only the current account figures out Monday morning we saw a slight dip with a figure that was lower than expected; however, this still showed a healthy balance sheet for the Eurozone economy.

With the euro still trying to recover from losses suffered at the hands of the Swiss National Bank (SNB) last week, we saw a gradual recovery on Monday as investors started to invest back into the single currency. However, with the currency still trading at highs not seen since 2008, we could find this euro strength short-lived with news of their asset purchasing programme and Greek elections being the driving factor for euro weakness leading up to the end of the month.

Posted January 19th, 2015 by Charles Purdy

Euro under pressure

The euro and the Eurozone are under pressure. Last week turned out to be one of the worst weeks in years for the euro, particularly against the US dollar as it hit 11-year lows and against sterling as it 7-year lows. And this week is likely to increase the uncertainty and pressure given the various key events and releases that are happening.

The situation worsened with downbeat Eurozone inflation data, causing further expectations that the European Central Bank (ECB) will announce additional stimulus measures in its upcoming policy statement on Thursday. It would seem now that the ECB is left with no choice but to implement quantitative easing on a large scale with the central bank expected to pump €500 billion to €1 trillion into the Eurozone economy.

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