The Euro began the week strengthened against the safe haven US Dollar after the single currency found support from comments made by European Central Bank President Mario Draghi. The President told reporters that he expected the Eurozone economy to make a recovery later in the year and that the region is on track.
On Tuesday the currency edged upwards against the Pound after data showed that contraction in the Eurozone’s manufacturing sector eased in May. Although economists predicted that the gauge of manufacturing activity for the 17-nation currency bloc would remain unchanged from April’s 47.8. It actually rose to 48.3 in May, taking it closer to the 50 mark which separates growth from contraction.
A series of confusingly mixed data releases is making it difficult for economists to accurately judge the Eurozone’s performance.
Following on from the improved data on Tuesday, Wednesday saw the Euro weaken against Pound Sterling after the latest Eurozone Purchasing Managers Index for Services came in worse than economists had forecast. The PMI contracted to 47.2, down from 47.5 in the previous month. Any figure below 50 marks a contraction.
On Thursday the Euro edged downwards after the ECB did what was widely expected and held its main lending rate at the record low level of 0.5%, the same level it was left at last month after a quarter-point cut by policy makers. Weighing on the currency was the news that Finland fell into recession during the first quarter of the year.
At the end of the week the Euro held steady against the US Dollar due to the release of better-than-expected trade balance data out of Germany.
Major events next week for the Euro
Monday 10th June – Euro-zone Sentix investor confidence data – 8:30 am
Italian GDP – 9:00 am
Wednesday 12th June– Euro German Consumer Price Index – 6:00 am
Eurozone Industrial production – 9:00 am
Thursday 13th June – ECB monthly report – 8:00 am
Friday 14th June– Eurozone CPI data – 9:00 am
Euro Exchange Rates (as of 12:30 pm GMT)
The Euro is trading against the Pound in the region of 0.8514
The Euro is trading against the US Dollar in the region of 1.3264
The Euro is trading against the Australian Dollar in the region of 1.3957
The Euro is trading against the New Zealand Dollar in the region of 1.6675
The Euro is trading against the Canadian Dollar in the region of 1.3586
The Pound is trading against the Euro in the region of 1.1775
The US Dollar is trading against the Euro in the region of 0.7559
The Australian Dollar is trading against the Euro in the region of 0.7174