Yesterday the Euro broadly strengthened as consumer confidence in the Eurozone and Germany strengthened by more than forecast.
The Euro was little changed this morning in a quiet market as all eyes turn to the US and await the conclusion of the Federal Open Market Committee’s two-day policy meeting.
According to industry expert Marc Ostwald when Fed Chairman Ben Bernanke issues his statement at 19:30 GMT he will be expected to deliver on certain things if calm is to return to the market.
Ostwald stated that Bernanke must: ‘persuade markets that the Fed and other central banks can exit quantitative easing without inflicting a cataclysmic blood bath and without forcing a more substantive deleveraging, and wholesale write-off of non-performing assets in the mainstream financial sector, and also not unleashing wholesale destruction in the shadow banking sector. [It] looks to be an extraordinarily tall order for a man, who […] is clearly weary of fighting a good theoretical fight which founders eternally on the myopia of unreconstructed and totally self-interested politicians and the captains of the financial sectors, along with those pesky realists that inhabit the ECB’s increasingly numerous hawkish wing.’
Later today construction output figures for the Eurozone will be released. Although the figures are unlikely to cause much in the way of market movement, it will be interesting to see whether April’s figures are an improvement on those recorded in March.
In March construction output in the currency bloc contracted by 1.7 per cent month-on-month and dropped 7.3 per cent year-on-year.
In other European news economists are expecting that Norges Bank will hold its key interest rates at their current level as a result of gains in the Krone being brought under control and inflation easing closer to target.
Tomorrow several data releases, including German and Eurozone services/manufacturing PMI, could inspire Euro movement.
Euro (EUR) Exchange Rates As of 08:55 –
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3399 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8559 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4125 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6705 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3666 <