The Australian dollar started the week on a strong note, with an upbeat market mood supporting the risk-sensitive ‘Aussie’. Recent strong data from China also gave AUD a boost, as the ‘Aussie’ often trades as a proxy for the Chinese economy.
With the Eurozone’s powerhouse economy continuing to show signs of a slowdown the appeal of the single currency naturally weakened.
While international trade tensions have shown signs of easing since the start of the year, the spread of the Wuhan coronavirus strain still looks set to keep global trade under pressure.
As a result, markets see a risk of German industry losing further momentum in the first quarter of 2020, opening the door to a potential economic contraction.
Commentary from European Central Bank (ECB) policymakers is unlikely to offer the euro any real encouragement this week, unless their tone leans away from dovishness.
On the other hand, EUR exchange rates could see some major volatility in the wake of the fourth quarter German gross domestic product report.
If the German economy is found to have lost fresh momentum in the fourth quarter the euro could experience a fresh downtrend across the board.
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)