At the start of last week the Euro firmed against the majority of its most traded peers following the release of better than expected data out of Spain and Portugal.
Spain posted positive PMI data and Portugal posted better than forecast consumer and business confidence data. Weaker than forecast data releases out of the UK and USA also supported the single currency.
On Tuesday the Euro struggled to take advantage of positive news out of Ireland. 10-year bonds in the country fell to their lowest level since 2009, following strong demand at the nation’s first bond sale since exiting its bailout last month. The high demand shows that confidence is returning to the Eurozone. Despite the positive news out of Ireland the currency came under pressure after a data release showed that inflation across the Eurozone slowed unexpectedly. The data put a downer on and countered the positive German jobs and retail sales data released early in the session.
Midweek the currency fell against the Pound and declined against the majority of its other peers after unemployment data showed that the number of European citizens out of work remained at record highs. Creating concern over jobs was the report which showed that unemployment in Italy hit a new record high. The currency did briefly find support from positive retails sales data.
The Euro rallied to trade close to a one-week high against the US Dollar and regained ground against the Pound after data out of the US and UK weighed upon their respective currencies. The Euro also found support from the European Central Bank’s decision to maintain interest rates at the record low level of 0.25%.
As the week drew to a close the single currency found support after data showed that industrial output in France and Spain was better than expected, suggesting that the Eurozone recovery is having some positive effects.
Looking ahead to the week ahead the Euro is likely to soften against the Pound if data out of the UK comes in positively, if not than it will push higher if Eurozone data shows improvement. Thursday promises to create volatility as all eyes will be on the latest Eurozone inflation reports.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3661 ,
Euro,,British Pound,0.8302 ,
Euro,,Australian Dollar,1.5078 ,
Euro,,New Zealand Dollar,1.6334 ,
US Dollar,,Euro,0.7319 ,
Australian Dollar,,Euro,0.6630 ,
New Zealand Dollar,,Euro,0.6120 ,
(Correct as of 11:25 am GMT)
Key events for the week ahead
Tuesday 14th – Eurozone industrial production
Wednesday 15th – Balance of Trade
Thursday 16th – Eurozone inflation