The US dollar fell to two-week lows against its major rivals yesterday after concerns over the US economy’s resilience sapped USD demand.
Germany, Italy and France have all closed nightclubs, while some German states have also closed cultural and leisure venues and introduced curfews for bars and restaurants.
The euro’s losses may have been limited somewhat by a weakness in the US dollar, thanks to the two currencies’ strong negative correlation.
So far this week, the euro has lost further ground despite some better-than-expected German data. German retail sales unexpectedly rose in November while unemployment fell by more than forecast last month.
The downside seems to have come from the divergent policy between the European Central Bank (ECB) and its key counterparts, the BoE and the Federal Reserve. This divergence could continue to weigh on the single currency this week and on into 2022.
EUR investors will likely be hoping that more German data later in the week will also print higher than projected, with German factory orders on Thursday and the country’s balance of trade figures on Friday.
Also on Friday, the eurozone flash inflation rate for December is out. Will easing inflation support the ECB’s dovish policy approach and weaken 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)