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Posted June 1st, 2016 by Charles Purdy

Positive Day Overall for Euro

It was a positive day overall for the euro yesterday as it strengthened against sterling and the US dollar. However, rather than this being a result of major strengthening in the single currency, it was largely because of weakness in the pound and greenback.

Economic data from the eurozone came out as anticipated, with the flash Consumer Price Index (CPI) figures moving up slightly from -0.2% to -0.1%. In addition, the release of the unemployment figures showed that they had remained unchanged at 10.2%. Although this had very little effect on the euro, it was important that the figure didn’t come in weaker than before as this could have caused some weakening of the euro.

Later today, we will have the release of the Manufacturing Purchasing Managers’ Index. It is due to be released at 9am and is expected to fall slightly to 51.5 from 51.7 the month before. However, any figure over 50.0 signifies growth – it’s more a case of gauging whether growth is slowing, improving, or staying as is. Indeed, any improvement on last month’s data could lead to some further strengthening. It is fair to say that the main focus of the week is on the all-important eurozone interest rate decision from the European Central Bank’s President Mario Draghi on Thursday.

If you want to get a handy newsletter in your inbox every Monday, Tuesday, Wednesday, Thursday and Friday, you can subscribe to our daily currency note and read through the archive. It is completely free to access and includes a summary of the previous day’s events and the economic calendar for the day ahead. Importantly, we consciously strive to present currency movements in context so you not only understand what is happening, you can appreciate what this means and how it could affect your business’s profit, margins and bottom line.

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Posted May 11th, 2015 by Charles Purdy

Euro loses is lustre

The Euro suffered weakness at the end of last week losing ground against both the US dollar and sterling as US employment data supported the former and the surprise UK election result boosted the latter.

Looking to this week, important Eurozone data begins with the Eurogroup meeting on Monday, where the top finance ministers will discuss the bloc’s economic policy and Greece’s latest proposals. Greece could default on a €750 million repayment to the International Monetary Fund (IMF) due on Tuesday, unless their bailout conditions are relaxed. It remains to be seen if the IMF will relent. The situation is uncertain for Greece, and for the Eurozone on the whole.

Posted May 7th, 2015 by Charles Purdy

Euro continues its upward march

Wednesday was a positive day for the euro – although it did struggle in the morning, thanks to poor European retail sales data which came out slightly worse than expected at -0.8%. The single currency’s gain against both sterling and the US dollar was generally due to weakness from the other two currencies, and saw the euro gain over 1% against both currencies as the afternoon progressed. This morning, manufacturing orders for Germany are released – and this has been forecast to improve on the previous figure of -0.9% to 1.5%. There is very little data out for the rest of the day but no doubt the UK general election will affect the euro currency market, and given the recent trend most likely in favour of the European currency.

Posted May 5th, 2015 by Charles Purdy

Euro continues its upward trajectory

Last week the euro continued its extended rally against the US dollar, moving to a 10-week high as Greece managed its most significant concessions since heated negotiations began with its creditors in February. Athens leaders are still hoping to reach a new bailout deal before the €750 million payment is due to the International Monetary Fund (IMF) on 12th May. This is on top of Greece owing the IMF an additional €200 million on the 6th May.

With this working week starting on Tuesday for the UK, we missed out on a manufacturing Purchasing Manager’s Index (PMI) data from Europe on Monday, which was a forecast to come out at 51.9.

Posted April 30th, 2015 by Charles Purdy

The euro continues to surprise

The euro had a positive day again, rising to two month highs against the struggling US dollar on Wednesday, thanks to the release of figures showing that the US economy has begun to slow down from recent impressive figures, making a rise in US interest rates less likely.

The strength was supported by better news for the European economy. German consumer price index had risen at a rate of 0.4% in April; this was broadly in line with market expectations, but most importantly this eased concerns over the threat of deflation for the European economy as a whole. Further data showed that the Eurozone lending to the private sector had moved higher in March for the first time in three years, and consumer inflation increased for the first time in 2015.

Posted April 28th, 2015 by Charles Purdy

Euro steady as hope increases for a Greek debt settlement

The euro held steady on Monday after last week’s euro strength, when poor US data put the pressure on the demand for the US Dollar currency. The underlying problem for the single currency is that it remained in a vulnerable position after the European finance ministers said that Greece must present a full economic reform plan by early May in order to access any further funding. This seems more likely following the side lining of the Greek Finance Minister from the negotiations following an acrimonious meeting between the Eurozone Finance Ministers last week. The end game must be soon as Greece has very little money left.

Posted April 24th, 2015 by Charles Purdy

Euro just about holds its own

Thursday was an unusual day for the euro; poor Purchasing Managers Index (PMI) data came out worse than expected, but the single currency managed to push higher against the US dollar, after downbeat US jobless claims and new home sales data put a large dent in the demand for the American currency. Another disappointing report for Spain’s unemployment rate showed a rise to 23.8% in the first quarter of this year, from 23.7% in the three months to December. This rounded off a less than positive week for the euro as it continued to wobble particularly against sterling when previously it had started to show small signs of recovery.

Posted April 23rd, 2015 by Charles Purdy

Euro slides against sterling

The euro remained under pressure on Wednesday, with the Greek government no closer to reaching an agreement with its Eurozone partners, and the International Monetary Fund (IMF) accessing the remaining bailout funds; this fuelled fears that the country could be forced out of the Eurozone. Previously, the single currency had climbed to its highest point in over a week against the US dollar, following some weak US economic reports, but the fallout from the Greek discussions along with stronger data from the US reflected poorly on the euro.

The single currency hit a month low against sterling also, as the Bank of England minutes were very much in favour of keeping interest rates where they are, some investors had been worried a cut in interest rates may have been on the cards.

Posted April 21st, 2015 by Charles Purdy

Euro has a steady start to the week

There was a fairly muted performance from the euro on Monday, but generally the currency weakened thanks to a continued lack of agreement on the economic reforms for bailout funds between Greece and its creditors. It certainly looks as though Greece is no closer to reaching an agreement with the rest of the eurozone and the International Monetary Fund (IMF) over reforms of the bailout funds, which creates a real fear that Greece could be forced out of the euro zone.

Producer Price Index data from Germany was released on Monday morning, coming out marginally worse at 0.1% – but the impact of this was very limited.

Posted April 16th, 2015 by Charles Purdy

Despite protests the euro holds steady

It was a surprising day for the euro as it initially pared losses against the other major currencies after European Central Bank President Mario Draghi said it expects to fully implement all of its quantitative easing program. During the conference Mario Draghi was then attacked by a protester shouting ‘end the ECB dictatorship’, a telling sign for how many countries feel about the central bank. The ECB also maintained its benchmark interest rate at 0.05% beforehand, in line with market expectations. Since Draghi finished speaking, the euro did works its way back to its previous position before the conference.
Yesterday was the main day for the single currency and now the only other major piece of data will be Consumer Price Index and balance of payments on Friday morning.

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