The euro started the week on unstable footing, still suffering the hangover from last week’s central bank rate cut. Traders remained nervous about the very real prospect of the Eurozone as a whole slipping into deflation, with many areas already experiencing such conditions.
As the week went on, traders looked toward yesterday night’s speech European Central Bank President Mario Draghi; as such, the euro remained relatively range-bound, holding near 14-month lows against the US dollar. In last night’s speech, Draghi urged Eurozone governments to put in place concrete measures to encourage and support investment so as to help their economies grow. The euro enjoyed a short term boost which faded away as the night went on.