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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.

The release to keep an eye on today are yearly private loan figures from the Eurozone as a whole. The figures are forecast to come in at -1.5%, marginally better than the previous month’s -1.6%.

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 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 15th, 2014 by Charles Purdy

Euro holding steady as focus seems to be elsewhere

The euro held firm on Friday, bringing to a close what was relatively flat week for the single currency. Comments made by central bank governing member Luc Coene on Friday highlighted policy makers’ ambivalence towards the weakening euro, suggesting that, if anything, they welcomed it. A weaker currency would likely stimulate growth in the region and curb the drop in inflation, as the relative cost of exports decreases – thereby attracting foreign investment.

Looking forward to this week we have German economic sentiment data out tomorrow, and on Wednesday we will see yearly inflation figures for the European bloc.

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

Posted September 8th, 2014 by Charles Purdy

Euro less “ugly” than sterling for the time being

Scottish Independence has turned the euro, in the eyes of the market, into the less ugly one of the two ugly sisters. Not a mean feat given that European Central Bank (ECB) President Mario Draghi has signalled for a minimum of 700 billion euros of aid for the stalling Eurozone economy, whilst promising to ‘significantly steer’ the ECB’s balance sheet nearer to levels in early 2012, to 2.7 trillion of euros, compared to the 2 trillion currently. On Friday the key data release was revised growth figures, which were in line with expectations and thus having little impact on the currency.

Posted September 5th, 2014 by Charles Purdy

Euro suffers heavy losses following surprise easing measures from ECB

The highlight of the week was the euro having the rug pulled from underneath it yesterday, dropping down to July 2013-lows against the US dollar following an unexpected move from the European Central Bank (ECB) to cut all three of their main interest rates by 0.1%. This included dropping its main refinancing rate to a historic low of 0.05%, whilst lowering the deposit rate to -0.2%! In the press conference following the decision, policy-makers also announced that the central bank would introduce additional stimulus measures in the form of asset-backed securities purchases.

The ECB caught the market by surprise yesterday, but highlights how conditions have continued to deteriorate across the 18-nation bloc, with both inflation and employment levels coming in below even the most pessimistic expectations from the start of 2014.

Posted September 3rd, 2014 by Charles Purdy

Euro slips back into negative inflation

The euro was undermined yesterday, dropping off against the majority of its peers again (bar a particularly weak sterling) after further worrying data releases. Following Monday’s manufacturing industry figures, yesterday’s inflation data showed that, if Germany and France are taken out of the equation, the Eurozone has slipped back into negative inflation levels. The euro’s only saving grace was a particularly weak sterling, which prevented a further euro sell-off that might have otherwise been the case.

Today we look to data from the services sector from countries across the euro bloc but, as alluded to in yesterday’s market update, traders will have one eye on Thursday’s interest rate decision and the press conference that follows.

Posted August 28th, 2014 by Charles Purdy

Euro awaits tomorrows inflation data

The euro gained some strength for the first time in four days, moving it away from four-year lows against the US dollar. A Reuters report released yesterday referenced anonymous European Central Bank (ECB) sources, stating that no stimulus measures will be implemented unless we see a serious risk of deflation. As mentioned in yesterday’s note, the ECB has cited inflation as the primary gauge for forthcoming monetary policy decisions. As such, eyes will still be firmly on tomorrow’s yearly flash estimate, forecasted to come in at 0.3%. Today’s German preliminary monthly inflation figures will also hold some sway, as will European business and consumer confidence data released this morning.

Posted August 27th, 2014 by Charles Purdy

Euro under pressure, key inflation data at the end of this week

We saw the euro drop off to fresh lows against the US dollar early yesterday morning, hitting its weakest level since this time last year. As the US dollar continues to gather momentum across the board, the euro, in turn, is increasingly undermined by European Central Bank (ECB) policy that is seemingly shifting further towards increased support measures.

We could see the euro somewhat range-bound this week as traders look towards Friday’s inflation data, with traders unwilling to make any significant bets before the release. Inflation has been singled out as the primary gauge for future monetary policy decisions, and the figures are forecast to come in at 0.3% year-on-year.

Posted August 20th, 2014 by Charles Purdy

Euro – up against sterling, down against the dollar

The lack of influences from within the Eurozone meant that movements in single currency rates occurred largely as a result of events elsewhere yesterday. The euro strengthened against sterling as a result of poor inflation data from the UK, while it weakened against the US dollar in response to stronger than expected Building Permits figures. The only data of any significance from the eighteen-nation bloc was current account data, which disappointed and illustrated a lower-than-expected flow of capital into the Eurozone.

Today’s line-up is not dissimilar from yesterday’s as once again we have high-impact events taking place in the UK and the USA – in the format of activity from the Monetary Policy Committee (MPC) and Federal Open Market Committee (FOMC) respectively – yet little of note from within the Eurozone.

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