Eurozone stumbles through heavy week
Currencies Direct January 30th 2015 - < 1 minute read
After a week of European data throwing the euro from pillar to post, the currency looks to have settled around the GBP/EUR 1.3350 level and EUR/USD 1.1330 level Friday morning. After news of the Swiss National Bank’s decision to stop its peg to the euro, the Greek election, the ECB confirming a QE programme and Germany’s inflation rate becoming negative for the first time in more than five years (provoking a slump in consumer prices in the Eurozone); prices fell 0.5% from a year earlier.
Sterling has taken a back seat this week due to the Eurozone rollercoaster, and the only data of note was UK Gross Domestic Product, which was slightly weaker than expected. Sterling also took a tumble late on Thursday after US Initial Jobless Claims produced figures matching the lows of 2000; driving more optimism in investors that the US labour market is continuing to grow at a more than comfortable pace. This backed up the Federal Reserve’s patient tone regarding interest rates, with June the most likely month in which the 0.25% rate could be altered. GBP/USD had been nearing the psychological 1.50 level late Thursday but has opened this morning looking to breach 1.51.
Next week we get interest rate decisions for a number of countries and the main one of interest looks set to be Australia, where a growing belief that there may be a further cut in interest rates has resulted in the recent decline in the Aussie dollar.
Today we have GBP mortgage approvals, Eurozone Consumer Price Index data and the unemployment rate. Canadian Gross Domestic Product and USD annualised Gross Domestic Product will top off the trading week.