Euro movement summary:
The Euro was able to achieve a 16-month high against the British Pound over the weekend as top ratings agency Moody’s cut the UK’s coveted AAA credit rating, citing a poor growth outlook for Britain.
However, an inconclusive Italian election led to fears of a hung parliament in the Eurozone’s fourth largest economy. The political upheaval this would entail could put significant stress on the currency bloc’s fragile economic recovery.
Consequently, after the results of the election were publicised the Euro dropped against several of its biggest currency rivals. Against the US Dollar the Euro fell to a 7-week low.
An Italian bond sale and impressive German unemployment data helped the Euro claw back some of its losses as the week progressed, although the revelation that the Netherlands will miss the EU’s budget deficit limit for the next two years meant that these gains were short lived.
As the week came to a close the benefits of positive German retail sales figures were outweighed by the drawbacks of a record high unemployment level for the Eurozone and the Euro fell against the US Dollar. Unemployment in the 17-nation currency bloc has now reached 11.9 per cent, the highest since records began in 1995.
Coming up next week:
Key pieces of economic data to look out for include Eurozone PMI on Monday and Eurozone GDP on Friday. The European Central Bank’s rate decision on Thursday will be a significant cause of volatility.
Any news relating to the political situation in Italy will also be of interest.
Euro Exchange Rates (as of 12:23)
The Euro is trading against the Pound in the region of 0.8668
The Euro is trading against the US Dollar in the region of 1.3030
The Euro is trading against the Australian Dollar in the region of 1.2780
The Euro is trading against the New Zealand Dollar in the region of 1.5782
The Euro is trading against the Canadian Dollar in the region of 1.3446