Currency Note Euro

ECB meets this week, “no change” is the expected outcome

By Ricky Bean May 6th, 2014

Data releases from the Eurozone were similarly mixed on Friday and rate movements were seen in both directions due to the high volume of influential releases. Unemployment in the eighteen-nation bloc fell marginally to 11.9%, indicating higher levels of job creation than had been expected. Spanish manufacturing figures came through worse than expected, whilst output in Italy exceeded expectations. Data for both nations indicated growth. Later on in the day, the euro lost ground against the US dollar following positive US labour data but recovered towards the end of the day.

This week’s market chatter is likely to centre the European Central Bank’s (ECB) interest rate decision and the press conference that follows on Thursday. Judging from the most recent comments of ECB President Mario Draghi, we are unlikely to see any further reductions in interest rates this month but investors will still be paying close attention to the following press conference as they try to determine the likelihood of future cuts or asset-purchasing programmes. That being said, some leading institutions are suggesting a rate-cut could be imminent with leading Japanese Investment Bank Nomura predicting the ECB will cut all key interest rates at the June meeting. In addition to Thursday’s activity, Industrial Production data from France and Germany and unemployment figures from Spain all due out today may also have an impact on euro rates.

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