We had a fairly quiet Monday yesterday in terms of data releases, but the data that was released was, for the most part, positive. Eurozone Industrial Production figures were up 0.6% compared to -0.3% last month, a positive signal for the Euro. Having said this, the communal currency declined versus the majority of its traded peers, and the Euro Index (EUR-I) finished the day around 164.2, down from a 164.8 start. The cause of this downtrend can be attributed to traders’ fears of an overvalued Euro following the uptrend born of negative correlation with the US dollar. Many analysts expect the European Central Bank (ECB) will look to expand stimulus in hopes of normalising the currency to justifiable levels, and to encourage domestic inflation.
Some data points to look out for today that could cause significant movement on the euro front are: Consumer Price data from France and the UK early in the morning, followed by economic sentiment data from Germany, as well as from the Eurozone as a whole and the Eurozone July Trade Balance. Depending on results, there is potential for today’s figures to undermine yesterday’s positive figures.