It was a difficult day for the euro as the decline in Germany’s influential ZEW business confidence data started to have a bigger impact on the single currency as it fell to the weakest level in more than a year. This reinforced an ever-growing and substantial case for the European Central Bank (ECB) to alter its monetary policy. Deflationary pressure throughout the global economy will also be a major concern for the ECB to tackle. The euro did still manage to have an encouraging afternoon against sterling; with the US markets re-opening, there was a sharp sterling sell-off, which the euro benefitted from.
No news or data today so a quieter day is expected on Wednesday. However, given all of the uncertainties and pressures on the Eurozone and global economies plus on-going discussions on revised EU membership terms for Britain, events from elsewhere have the potential to trigger significant euro movement.