German Business Climate data disappointed on Friday last week, underlining the declining faith in the Eurozone’s economic recovery. The worse-than-expected figures were the worst we have seen in 2014 and caused general euro weakness. Howevever, it is worth noting that, while the euro did fall against the US dollar, it managed to strengthen slightly against sterling as a result of sterling influences.
While we enjoy a bank holiday in the UK on Monday, European Central Bank (ECB) President Mario Draghi will be addressing the ECB Forum in Portugal. Given that most commentators are almost certain that Draghi will alter policy in his next meeting, traders are likely to react to the address if any further hints are given as to what action is to be taken. The Forum will run no into Tuesday, when Draghi will offer some closing remarks. Aside from this early address, the week is looking relatively quiet in terms of data from the Eurozone. German Retail Sales data on Friday may inspire some rate movements, but it is likely that once again media leaks, addresses from key figures and market chatter are likely to dictate how the single currency performs this week.
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