While the Euro was able to recover losses against several of its most traded rivals yesterday as German manufacturing PMI and Eurozone investor confidence increased, the common currency later slipped against safe-haven counterparts the US Dollar and Yen.
The Euro is currently trading against the US Dollar in the region of 1.3485
With European Central Bank President Mario Draghi scheduled to speak today ahead of this week’s ECB rate decision, investors are weighing the odds of the central bank alluding to future rate cuts and the Euro is coming under pressure as a result.
Although the benchmark rate is already at a record low, the tentative and patchy nature of the Eurozone’s recovery could prompt an additional rate cut from the ECB in the months ahead.
According to currency strategist Hamish Pepper, ‘We expect Draghi to be fairly dovish, and I think people are already beginning to position for that, either by cutting Euro longs or initiating Euro shorts.’
The Euro is also likely to be affected in the hours ahead by economic growth forecasts for the Eurozone, which European Union Economic and Monetary Affairs Commissioner Olli Rehn will publish later today.
The Eurozone producer price index will also be of interest.
Although the Euro could slip further if growth forecasts for the currency bloc are negatively revised, if US ISM non-manufacturing figures show the decline expected (lessening the likelihood of the Federal Reserve tapering stimulus) the Euro could recover ground against the ‘Greenback’ before the close of the European session.
In other Euro news, overnight the common currency was able to post a notable advance against the ‘Aussie’ as the South Pacific asset broadly softened in the aftermath of the Reserve Bank of Australia policy meeting.
The Euro was little changed against the Pound ahead of the release of UK services PMI. Although UK BRC sales data disappointed expectations this morning, Sterling largely held on to the gains secured yesterday as a result of stronger-than-anticipated UK construction data.
But even after today’s fluctuations, with German and Eurozone services PMI scheduled for release tomorrow additional Euro volatility can be expected.
Euro (EUR) Exchange Rates
As of 08:50
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3485 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8450 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4221 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6295 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4089 >