The US dollar was placed on the defensive on Friday due to doubts whether the Federal Reserve will be willing to hike interest rates amidst worries over a new Covid variant of concern.
As the ECB’s January meeting occurred before the extent of the Covid-19 outbreak became clear the positive impact of the minutes soon started to fade.
EUR exchange rates were able to hold onto a positive footing ahead of the weekend, however, after the German manufacturing PMI bettered expectations.
While the manufacturing sector remained trapped in a state of contraction the euro took encouragement from the fact that the PMI did not dip deeper, suggesting that the decline is bottoming out.
Although no revision to the finalised fourth quarter German gross domestic product is expected the details of the report could put renewed pressure on the single currency.
Any softening of the German consumer price index could also see EUR exchange rates fall out of favour, with weaker inflation giving the ECB less incentive to avoid monetary loosening.
The latest set of Eurozone business confidence surveys may encourage further demand for the euro, though, as long as sentiment shows signs of improvement.
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)