The euro has had a difficult week despite re-gaining some of the losses against the US dollar and euro on Thursday. On Monday the tone was set for a disappointing week after the Eurozone released data which confirmed that the area fell back into deflation in February for the first time in five months, which has increased expectations for additional stimulus measures to be announced by the European Central Bank (ECB) next week. The reading showed that Consumer Price Index (CPI) data fell to -0.2% after a positive reading in January. The fightback on Thursday began as Purchasing Managers Index (PMI) figures came out slightly better than expected, and retail sales also beat expectations, at 0.4% instead of the forecast 0.1%.
We are likely to see a slow end to the week in terms of Eurozone data releases. The focus, therefore, is on events elsewhere, such as the US, where labour market data takes centre stage.
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