The euro enjoyed a strong end to the week on Friday as it moved back up against sterling and the US dollar, particularly after downbeat US jobs data dampened optimism over the US economy. The eagerly-awaited US nonfarm payrolls report for September came out much worse than expected, which in turn strengthened the single currency, which is the second-most traded currency in the world.
Over the weekend we had the Portuguese General Election and the centre right coalition party was re-elected but without an absolute majority. This is a much needed fillip for the Eurozone as it seems that the Portuguese electorate have “accepted” the need for reforms and austerity.
After a strong week the euro can look forward to more positive news dripping through the markets. On Monday the Eurozone releases retail sales and Purchasing Managers’ Index (PMI) data. The latter is forecast to fall to 53.9 from 54.3, while retail sales is likely to fall to a negative figure of -0.1%, down from 0.3%. If the Eurozone economy manages to improve on last month’s figure we could see the single currency break through key resistance levels against its major currency pairs. Another key piece of data will be manufacturing orders from Germany on Tuesday, which is forecast to vastly improve from -1.4% up to 0.4%. It is looking like a busy week, with many opportunities for data to affect euro markets.