Yesterday was a mixed day for the single currency as events elsewhere dominated proceedings. Poor data from the UK and the US caused the euro to strengthen against both currencies, but while sharp gains against sterling were held throughout the day, ground made against the US dollar was quickly rescinded. Industrial production data from the Eurozone came out relatively poorly, illustrating contraction rather than the forecast moderate growth in the sector. However, the significance of this was greatly diminished by events elsewhere across the globe.
Today we may see events from within the Eurozone have a greater impact on rate movements as we expect, amongst other data, preliminary growth figures from Germany. Other economic indicators have suggested that we may be seeing a slowdown in Europe’s largest economy, and traders will be interested to see if the growth figures confirm this. We are expecting the data to show very slight contraction in the second quarter, so results that differ significantly from this are likely to cause sudden rate movements. In addition to this, we also expect French unemployment data and the European Central Bank (ECB) Monthly Bulletin, both of which could play a role in determining how the euro will perform today.