The Australian dollar trended lower through the majority of last week, with the risk-sensitive currency struggling to attract support as a gloomy market mood prevailed through most of the session.
Eurozone industry had a good month in May, but the data released on Wednesday failed to boost EUR. This was because German wholesale prices stagnated on the month in June and growth slowed from 3.1% to 2.5% year-on-year, pointing to a weakening of inflationary pressures. This gives the European Central Bank (ECB) even more reason to hold tight on changing interest rates.
On Thursday, those tensions regarding the German trade surplus resurfaced as French President Emmanuel Macron took aim at the windfall. He claimed that Germany was benefitting from a ‘dysfunctional’ Eurozone and that it had a responsibility to use the surplus for the benefit of the Eurozone. Germany has long been criticised for failing to reinvest its budget underspends in ways that would boost domestic demand and therefore internal Eurozone trade, improving the economies of its neighbours.
Weakness in the US dollar benefitted the euro on Friday after a run of poor domestic data. Eurozone data was more positive, although the Eurozone trade surplus for May failed to rise by quite as much as forecast, hitting €19.7 instead of €20.2 billion on a seasonally-adjusted basis.
Influential German ZEW surveys of business are set for release on Tuesday, but the main event of this week will be the European Central Bank’s latest monetary policy meeting. No changes are expected to interest rates, but markets will be hoping this meeting is the one that finally sees discussion of changes to the vast quantitative easing programme.
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)