The euro slumped on Thursday following the European Central Bank’s (ECB) latest interest rate decision.
Lacklustre PMI results left EUR without a clear direction as the week went on. The composite eurozone PMI printed marginally above forecasts but private sector activity remained in contraction.
Anxiety over Europe’s energy crisis kept EUR under pressure for most of the week, while some fluctuations in the US dollar introduced volatility thanks to the currencies’ negative correlation.
However, Friday saw the single currency strengthen amid European Central Bank (ECB) rate hike bets. Reports suggest that some ECB policymakers may argue for a 75-bp interest rate rise at the bank’s next meeting.
Looking ahead, the August flash inflation rate for the eurozone is the key event on the calendar for EUR investors. If it exceeds forecasts it could boost rate rise expectations, thereby lifting EUR.
The bloc’s July unemployment rate could also support the euro. Economists expect it to hold at a historic low of 6.6%.
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)