Weekly Roundup: Euro fluctuates amid mixed data

Trade in the euro was mixed at the start of last week, with a weaker-than-expected PPI print from Germany quickly being offset by an improvement in Eurozone consumer morale.

The euro’s negative correlation with the US dollar then lent support to EUR exchange rates through the middle of the week as investors began to shun USD.

The single currency was also underpinned through this period by some a number of hawkish speeches by European Central Bank (ECB) policymakers. Before this was undermined somewhat by some dovish minutes from the bank’s October meeting.

The euro then closed the week on a positive note after Germany’s finalised GDP figures for the third quarter unexpectedly saw growth revised up from 0.3% to 0.4%.

Looking ahead, the publication of the Eurozone’s consumer price index will be centre stage this week.

November’s preliminary CPI figures are forecast to report inflation in the bloc has begun to ease after striking a record high in October. But if inflation overshoots expectations again it may bolster ECB rate hike bets and lift the euro.