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Weekly roundup: Rising Eurozone inflation fails to boost euro exchange rates

currency-newsWeekly roundup: Rising Eurozone inflation fails to boost euro exchange rates
Even though the headline Eurozone consumer price index accelerated to 2.2% in October this was not enough to shore up the euro last week.

While the inflation rate remains in excess of the European Central Bank’s (ECB) 2% target the prospect of an interest rate hike still appears distant.

Although markets still hope to see the ECB wind down its quantitative easing programme in December confidence in the outlook of the Eurozone economy has continued to deteriorate.

A sharp, surprise contraction in German retail sales added to the bearishness of EUR exchange rates, meanwhile, as the Eurozone’s powerhouse economy struggles to recover its lost momentum.

With the Italian manufacturing sector having fallen into a state of contraction in October this reignited fresh concerns over the economic outlook and the government’s controversial budget.

If October’s Eurozone services PMIs also show fresh signs of weakness the mood towards the euro is likely to remain muted.

On the other hand, a stronger showing from Germany’s latest trade data could encourage the single currency to return to an uptrend on Thursday.
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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