Euro stumbles amid poor consumer confidence
The euro slipped on Friday as consumer confidence in the eurozone in May stayed close to the 22-month low reached in March.
Just as the Bank of England (BoE) was the main cause of pound movement last week, the European Central Bank (ECB) was a key driver of euro volatility.
Although officials were quick to quash hopes that the ECB plans to taper its expansive quantitative easing scheme (implying that comments issued by President Mario Draghi had been misinterpreted) speculation that some adjustment will take place before the end of the year remains.
Hints that the ECB plans to review its current approach to monetary policy were also dropped by ECB official and head of Germany’s Bundesbank Jens Weidmann.
Weidmann noted; ‘What we are discussing and even arguing about is how expansive monetary policy should be given our [inflation] target’.
Last week’s German and Eurozone CPI numbers also came in more strongly than anticipated, with annual inflation in the currency bloc easing from 1.4% to 1.3% rather than the 1.2% predicted.
Of the Eurozone data set for release this week, the reports with the most potential to spark euro movement include the region’s retail sales numbers, Germany’s factory orders, construction and retail PMI figures and the European Central Bank’s (ECB) account of its last monetary policy meeting.
Upbeat data from the Eurozone would support the argument in favour of the ECB winding down quantitative easing and could prove euro-supportive.
Although officials were quick to quash hopes that the ECB plans to taper its expansive quantitative easing scheme (implying that comments issued by President Mario Draghi had been misinterpreted) speculation that some adjustment will take place before the end of the year remains.
Hints that the ECB plans to review its current approach to monetary policy were also dropped by ECB official and head of Germany’s Bundesbank Jens Weidmann.
Weidmann noted; ‘What we are discussing and even arguing about is how expansive monetary policy should be given our [inflation] target’.
Last week’s German and Eurozone CPI numbers also came in more strongly than anticipated, with annual inflation in the currency bloc easing from 1.4% to 1.3% rather than the 1.2% predicted.
Of the Eurozone data set for release this week, the reports with the most potential to spark euro movement include the region’s retail sales numbers, Germany’s factory orders, construction and retail PMI figures and the European Central Bank’s (ECB) account of its last monetary policy meeting.
Upbeat data from the Eurozone would support the argument in favour of the ECB winding down quantitative easing and could prove euro-supportive.
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)
