The US dollar struck higher at the start of this week, strengthening on the back of rising US Treasury yields driven by US stimulus optimism.
As the index strengthened from 55.0 to 61.8, this suggests that confidence among German businesses took a turn for the positive this month, easing fears over the economic outlook.
Stronger business confidence within the Eurozone’s powerhouse economy gave investors reason to bet that the first quarter could see greater resilience, reducing the risk of a fresh growth contraction.
Comments from the Bundesbank’s monthly report also offered EUR exchange rates support as policymakers indicated that inflation is likely to turn positive in January.
Even so, fresh volatility could be in store for the euro on Thursday in the wake of the European Central Bank’s (ECB) January policy decision.
Although no change in monetary policy looks likely at this stage, the single currency could still come under pressure if policymakers show any fresh signs of dovishness.
On the other hand, if the central bank expresses any confidence in the Eurozone’s economic outlook, the euro may gain fresh ground.
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)