Although the common currency has recovered some of the ground lost during the most testing days of the Cyprus crisis, the Euro continued to be knocked by less-than-impressive economic news this week.
Poor Eurozone manufacturing PMI began the week, causing the Euro to dip against most of its main rivals and pushing the currency to a five week low against the Yen.
This was followed by a report which showed that Eurozone unemployment had reached a record high of 12 per cent.
Although the Euro enjoyed a slight rebound mid-week in response to the International Fund pledging to provide Cyprus with up to a billion Euros, gains were tempered as investors looked ahead to the European Central Bank’s rate decision. The Euro was able to jump against the Yen however, after the Asian currency broadly softened following the Bank of Japan’s decision to double stimulus.
On Thursday the Euro declined against the majority of its counterparts after ECB President Mario Draghi hinted that additional rates cuts could be on the horizon. During the press conference Draghi also stated: ‘Weak economic activity has extended into the early part of the year and a gradual recovery is projected for the second half. [The outlook] remains subject to downside risks, including even weaker-than-expected domestic demand’.
And on Friday fears that the Eurozone’s economic slowdown is worsening were further fanned as retail sales were shown to have declined by 0.3 per cent in February. Retail sales have dropped by 1.4 per cent compared with the same period of the previous year.
Euro Exchange Rates (as of 12:18 pm GMT)
The Euro is trading against the Pound in the region of 0.8489
The Euro is trading against the US Dollar in the region of 1.2922
The Euro is trading against the Australian Dollar in the region of 1.2415
The Euro is trading against the New Zealand Dollar in the region of 1.5368
The Euro is trading against the Canadian Dollar in the region of 1.3095