The euro continued weakened yesterday in the absence of any influential data released from the Eurozone. Trade balance figures for the eighteen-nation bloc – showing the difference in value between imported and exported goods and services – came out worse than expected; however, the effect of these figures is muted by the fact that the equivalent data for individual states is released at an earlier date. As a result, the single currency continued to weaken against both sterling and the US dollar, although at a slower pace than the day before.
Today, the monthly Consumer Price Index (CPI) is set to be released, providing a key indication as to levels of inflation in the Eurozone. Inflation is a strong bearing on the direction of monetary policy and will play a role in determining whether or not European Central Bank (ECB) President Mario Draghi will undertake a quantitative easing programme or take further action to support the Eurozone’s economy.