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Posted September 30th, 2015 by Charles Purdy

Will CPI data help the euro rebound today?

Yesterday was a day of contrasting data for the Eurozone which saw the euro hold itself below the 1.35 level against sterling. Economic sentiment hit a four year high which suggests that European businesses have become more upbeat and that the quantitative easing programme is working whereas inflation in Germany fell to 0% this month, which should add pressure on the European Central Bank (ECB) to ramp up its quantitative easing programme. The ECB targets inflation of close to under 2.0%, which is a long way off, given current levels. German Consumer Price Index (CPI) data also fell to 0.2% from last month’s figure, compared to expectations for a decline of 0.1%.

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Posted September 29th, 2015 by Charles Purdy

Will the euro sustain yesterday’s good graces?

The euro had a good start to the day against sterling and the US dollar on Monday, as overall sentiment for a US rate hike in the upcoming months became more unlikely. It was a very quiet day for the single currency on the data front. Italian business confidence data was released, coming out much better than expected, at 104.2 in comparison to the forecasted figure of 102.7. The euro finally breached the key resistance level against sterling of 1.35, a key level it hadn’t broken since May this year.

Today is an important day for the single currency, with Business and Consumer confidence data due from the Eurozone.

Posted September 28th, 2015 by Charles Purdy

Euro ends the week on a high

Last week ended on a positive note after a rollercoaster ride for the euro; despite little data being released, it strengthened against both sterling and the US dollar on Friday. Against sterling, the strengthening was over 1% – pushing the British currency to its weakest level in a month.

This week is likely to get off to a quiet start, with nothing of note expected on Monday; early on Tuesday, retail sales data from Germany will be released; this is forecast to fall sharply to 0.3% from 1.4%. The main release for the week will be on Wednesday, as we have both the Consumer Price Index (CPI) and unemployment data being released; unemployment is most likely to remain unchanged at 10.9%, while CPI is forecast to keep its head just above negative levels, but nonetheless is expected to fall from 0.2% to 0%.

Posted September 25th, 2015 by Charles Purdy

The Euro has a better than expected week

After a poor start to the week, the euro staged a recovery following Wednesdays statement from the President of the European Central Bank that it was too soon to make any changes to their programme of quantitative easing (QE). Speculation had been rife that such a statement would be made with the aim of weakening the euro following its recent bout of strengthening. The reverse has now happened and we are close to support levels against sterling, which, if breached could see the exchange rate push back towards €1.30/£1.

The weakness for the euro at the start of the week followed the re-election of the Syriza party in Greece and the release of economic data that fell short of expectations.

Posted September 24th, 2015 by Charles Purdy

The euro strengthens thanks to Draghi’s announcement

The euro moved higher against the US dollar and sterling on Wednesday after European Central Bank (ECB) President Mario Draghi said it was too early to decide whether or not the central bank will add to its current stimulus program. Other than this we had Purchasing Managers’ Index (PMI) data from Europe which fell from 53.3 to 52.5 in September, while the services PMI ticked down to 54.3 from 54.9 but this data really did take a back seat though given Draghi was speaking in the afternoon.

Very early this morning consumer confidence data from Germany was released, and this was forecast to improve slightly from 9.8 to 9.9.

Posted September 23rd, 2015 by Charles Purdy

Euro investors focussed on today’s speech from Mario Draghi

It was a mixed day for the euro on Tuesday as it strengthened against sterling but disappointed against the US dollar as strong sentiment continued to surround the possibility of a US rate hike in 2015.

Greek Prime Minister Alexis Tsipras, who was re-elected on Sunday in the Greek’s second snap election had promised on Monday to help the local economy – but added that obtaining debt relief from Greece’s creditors was his priority for the time being. Consumer confidence data was also released, and this came out just worse than forecast at -7.1 but only marginally down from last month’s -6.9.

Posted September 22nd, 2015 by Charles Purdy

Euro falls thanks to possibility of larger QE programme

The euro began this week on a disappointing note, sliding down against both sterling and the US dollar on Monday. The British and American currencies had benefited from general positive sentiment from their markets, despite continuing concerns over Chi…

Posted September 21st, 2015 by Charles Purdy

Will Eurozone data this week generate euro weakness?

The euro remained relatively flat against sterling but struggled against the US dollar on Friday, pulling away from almost four-week highs as investors continued to ponder the Federal Reserve’s decision to hold interest rates for the time being.

Then this weekend we had the fifth Greek General Election in six years and the second one this year. There was no change with the Syriza party being re-elected and reforming the same coalition government. With debt renegotiations looming you hope that all participants have learnt the lessons of last time and sort out an agreement quickly. If not, I imagine we will see euro weakness.

Posted September 18th, 2015 by Charles Purdy

Steady week for the euro

Even though Eurozone data has been disappointing this week and even though we have the Greek election this weekend, the euro has had a good couple of weeks against the US dollar and is holding its own against sterling.

The Eurozone had a relatively poor week for data, with both Tuesday and Wednesday showing disappointing movements for the single currency zone . On Tuesday the euro struggled against the dollar largely down to the news that the Zentrum für Europäische Wirtschaftsforschung (ZEW) economic sentiment index in Germany had fallen to 12.1 in September – under half of the August figure of 25.0.

Posted September 17th, 2015 by Charles Purdy

Euro performance hinging on US Federal Reserve meeting?

The euro weakened on Wednesday against the majority of currencies after data showing that euro area inflation was revised lower for August added to fears that the European Central Bank (ECB) may have to scale up its quantitative easing programme in the coming months on top of the €60 billion-a-month programme that is already in place. ECB Vice President Vitor Constancio was reported as saying that the bank is still looking at the possibility to purchase more assets as its quantitative easing has been relatively small in comparison to that of other major economies.

Today there is little out on the data side of things, so the majority of markets will be focusing on the Federal Reserve meeting in the US.

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