The pound retreated on Thursday after the Bank of England (BoE) struck a more cautious tone than expected following its latest policy meeting.
This week’s eurozone news has so far only added to the euro’s appeal. Germany’s Ifo business confidence data showed higher expectations than forecast, reflecting optimism among German businesses.
This follows last week’s news that EU leaders agreed to a €750bn coronavirus recovery fund quicker than expected.
Support in EU fiscal policy and signs of improving data are keeping the euro appealing versus rivals like the pound and US dollar. Markets have been comparatively disappointed with the UK and US handlings of the pandemic.
While investors may be hesitant to keep buying the euro higher, upcoming Eurozone news could make it easier for the currency to hold its best levels if it impresses.
Key Eurozone data due toward the end of the week includes German and Eurozone growth rate data, while German retail sales and Eurozone inflation stats may also prove influential.
This data will show insight into the depth of recession in the Eurozone, and if it comes in notably worse than forecast, it could hurt expectations of Eurozone resilience. This, or an unexpectedly hawkish tone at Wednesday’s US Federal Reserve decision, could knock the euro.
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)