A string of poor data releases out of Germany early in the week were absorbed by the euro, which held its ground against the US dollar and the British pound between Monday and Wednesday. Both factory orders and industrial production figures came in below forecast, significantly down on the previous month’s release.
The figures put more pressure on European Central Bank (ECB) President Mario Draghi, to look to stimulus measures to inject some life in the bloc’s collective economy. As a result, eyes were on Draghi yesterday afternoon as he addressed the media, He cited ‘excessively low inflation’ as a major worry, and emphasised the need for structural reforms in the region. He also pledged to expand stimulus measures if needed but stopped short of giving any information about any specific measures. As a result we saw the euro lose ground against the US dollar pushing below the 1.27n level again.
Looking forward to today, we have industrial production figures from across the region, which will hold some sway on the performance of the euro. Eyes will also be on the ongoing G20 and International Monetary Fund meetings starting today.