The US dollar fell to two-week lows against its major rivals yesterday after concerns over the US economy’s resilience sapped USD demand.
Eurozone data last week may have printed strongly, but sentiment towards the common currency sometimes struggled to remain positive as investors focused on the many issues facing the currency bloc in the coming year.
The euro’s weakened on the 27th after a survey of Greeks revealed that under 20% actually believe the country will be able to smoothly exit its 3rd international bailout programme as the government claims.
Rather than a clean split, over 66% of Greeks believe that the nation’s finances will continue to be monitored internationally in some form once the bailout programme is officially concluded in August.
Meanwhile, investors were disappointed on the 28th with the latest Economic Bulletin from the European Central Bank (ECB).
Although the ECB continues to remain upbeat about the outlook for the Eurozone economy, revising its growth projections higher, its expectations for inflation remain muted.
This signals that, regardless of the strength of economic data to come, the chances of monetary tightening from the Governing Council remain slim until price growth picks up considerably.
Friday’s German consumer price index figures for December were therefore warmly received after beating forecasts.
Month on month consumer price growth doubled from 0.3% to 0.6%, marginally beating expectations of a rise to 0.5%.
Meanwhile, year-on-year price growth figures fell only 10 basis points to 1.7%, instead of dropping to 1.5% as economists had anticipated.
There is some key data on the calendar this week to start 2018 off on volatile form for the euro.
Tomorrow sees the release of the German unemployment change and unemployment claims rate figures for December; the euro could receive a boost if the unemployment rate does indeed fall from 5.6% to 5.5% as forecast.
After another slew of finalised PMIs - this time services and composite - on Thursday, Friday sees the release of German retail sales figures, the German construction and retail PMIs, Eurozone retail PMIs and the Eurozone consumer price index figures for December.
Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.