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Weekly Roundup: Euro recovers on ECB rate hike rumours

currency-newsWeekly Roundup: Euro recovers on ECB rate hike rumours
The euro suffered a sell-off early last week as Gazprom announced further disruption to gas supplies via the Nord Stream pipeline, sending EU energy prices to record highs.

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%.
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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