020 7898 0500The euro dropped to its lowest value since the start of February against the US dollar on Friday, thanks to strong US economic reports. Against sterling the euro also had a surprisingly poor morning, as it moved over 1% but the majority of this was eradicated in the afternoon. Data from the Eurozone on Friday showed that Germany’s consumer price index moved up to 0.4% in February, lower than the expected 0.5%, and down from last month’s 0.8%. This figure was actually the same as we saw this time last year.
The first main release for the week will be flash consumer price index from the Eurozone, a key figure as inflationary pressures continue to weigh on the single currency. On Wednesday Purchasing Managers Index for the euro is expected to fall again, from 52.3 down to 51 – and this is likely to cause euro weakness and increase the likelihood of the European Central Bank increasing its program of quantitative easing in the first half of March.
