It was another volatile and tough day for the euro on Friday, which saw the single currency continue its slide against the majority of its peers. The euro slid to fresh seven-year highs against sterling and also against the US dollar with lows not seen since September 2003. Data released on Friday morning, in terms of both manufacturing and services Purchasing Managers’ Indices (PMIs) for Germany, France and the Eurozone, was fairly negative on the whole, with only the French manufacturing PMI coming out better than expected. All the figures showed either contraction in their industries or very weak expansion.
And the bad news keeps on coming for the euro with Sundays Greek election resulting in success for the anti-austerity parties. Will it be a case of “light the blue touch paper and stand back” or will common sense prevail. I am sure there will be some tough negotiations and the Greeks certainly need some light at the end of the tunnel.
In addition there will be a lot of Eurozone data being released. Today we will have the German Business Climate (an indicator of economic health) as well as the start of the Eurogroup meetings, which will discuss the current Eurozone economy and those effecting it, which also moves on to Tuesday with the ECOFIN meetings (this is only attended by Finance Ministers from EU member states). We could see movements in the market from this as various reports are given throughout Monday and Tuesday. German retail sales are also expected from Wednesday.
German consumer inflation is expected Thursday. With the previous figure being 0%, we could see an expected fall that will run parallel with the EU Inflation, as well as German unemployment. Friday seems to be one of the busiest days on paper, as we are expected to see French consumer spending data along with inflation figures for Spain and the Eurozone. Inflation for the Eurozone is expected to continue falling for the short-term as reported by European Central Bank (ECB) President Mario Draghi on Thursday, until the ECB’s quantitative easing measures start stimulating the economy. Unemployment data is also out for the Eurozone, which has been static since August 2014.