The euro has not been master of its own destiny for the better part of this week as a dearth of data from the eighteen-nation bloc has allowed events elsewhere to determine movements in euro rates. Investor activity caused the single currency to weaken against both sterling and the US dollar on Tuesday as it continues to be seen as an unattractive prospect. The ground lost against sterling was made good throughout Wednesday as the UK Monetary Policy Committee dampened hopes of an imminent UK interest hike.
Yesterday’s economic releases had a short-term effect on the euro as better-than-expected German manufacturing data caused some spikes in favour of the euro. The movements were, however, limited to an extent by French manufacturing data that painted a contrasting situation with figures indicating greater contraction in the sector than was expected. Today’s main release is set to be monthly German Business Confidence data, which regularly has a sharp impact on euro performance.