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Weekly roundup: Euro dented by ECB stimulus reports

currency-newsWeekly roundup: Euro dented by ECB stimulus reports
The euro opened last week’s session on the defensive, after data showed German factory orders contracted a whopping 6.9% in October.

These losses were then reinforced by Germany’s latest ZEW surveys, which revealed economic sentiment in the Eurozone’s largest economy began to deteriorate again in December.

The single currency then found its feet again in mid-week trade, with the euro benefitting from a pullback in the US dollar as well as comments by European Central Bank (ECB) policymaker Mārtiņš Kazāks.

EUR investors seized on Kazāks’ comments in which he suggested the Omicron variant would need to do significant damage to the Eurozone economy before the ECB would be willing to step in with fresh stimulus measures.

This set up the euro for a sizable fall in the latter half of the week after Reuters reported the ECB might already be discussing plans to expand its Asset Purchases Programme (APP) at its December policy meeting.

Looking ahead, the ECB will conclude its December policy meeting later this week.

Should the ECB announce plans to expand its monthly bond purchases by between €40bn and €60bn from March as some reports suggest, then we are likely to see the Euro face some notable headwinds through the session.

Additional pressure may also stem from the release of the Eurozone’s latest PMI figures as they are forecast to report a slowing of economic activity in the bloc this month.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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