Currency Note Euro

Euro falls on poor data and possible interest rate cuts

By Ricky Bean September 6th, 2013

The euro has been on a slippery slope this week and has seen little respite in its slide against major peers. Last week we saw a lot of data from Germany, whereas this week we had a variety of data from the Eurozone’s other major economies. The data was mixed with the majority coming through worse than expected, this was in contrast to the more consistent economic indicators seen in the UK and the US. Thursday’s ECB rate statement and president Mario Draghi’s subsequent speech caused the seventeen-nation currency to weaken further as he discussed a further interest rate cut. This caused the euro to reach six-week lows against the US dollar and extended three-month lows against sterling yesterday. After an extended period of depreciation the euro is still looking for some support to kick in. Today we have German trade balance data and monthly manufacturing figures coming through, which may have some bearing on performance in the short term, but continued appreciation may prove to be illusive until we see some more consistent data.