Weekly Roundup: Euro knocked by dovish ECB expectations
Roxane Cody November 27th 2023 - < 1 minute read
The euro got off to a slow start last week, with EUR sentiment being undermined by another contraction in German producer prices last month.
EUR exchange rates then came under additional pressure in response to a series of dovish comments from European Central Bank (ECB) policymakers.
A cautious market mood helped the euro find some support in the middle of the week, but these gains proved fleeting as the minutes from the ECB’s latest policy meeting saw the central bank warn of financial stability risks in the Eurozone.
The end of the week then saw the euro remain on the back foot in response to some underwhelming data. Business activity in the Eurozone continued to contract in November, while German business morale saw a smaller-than-expected improvement over the same period.
This week the focus for EUR investors will undoubtedly be the Eurozone’s latest consumer price index. Expect to see the euro remain under pressure if inflation cools, amid speculation this may push the ECB to start discussing future interest rate cuts.