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Weekly Roundup: Euro hits parity with the US dollar

currency-newsWeekly Roundup: Euro hits parity with the US dollar
The euro raced higher at the start of last week’s session. Ukraine’s successful counteroffensive against Russian forces bolstered hopes for an earlier-than-expected end to the war.

However, these gains proved to be fleeting, with the single currency being pressured by another slump in Germany’s ZEW economic sentiment index in September.

This downturn was then turbocharged by the euro’s strong negative correlation with the US dollar, after a stronger-than-expected US inflation release catapulted USD exchange rates higher.

EUR exchange rates remained muted in mid-week trade following weaker-than-expected Eurozone industrial production figures.

The euro then mounted a recovery on the back of some hawkish comments from European Central Bank (ECB) Vice President Luis de Guindos, in which he urged the bank to prioritise tackling inflation over sustaining growth. 

There gains were then consolidated at the end of the week as the latest Eurozone CPI figures confirmed a record rise in inflation last month.

Coming up, we may see a speech by ECB President Christine Lagarde influence EUR trade at the start of this week. Will a hawkish outlook boost ECB rate hike bets and lift the euro?

However, the end of the week will see the publication of the latest Eurozone PMI figures potentially weaken the single currency if this month’s preliminary figures report the contraction in the bloc’s manufacturing and services sectors deepened.
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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