The euro continues to suffer from last week’s central bank interest rate decision, which saw the rate cut from what were already record lows. German trade balance figures released early yesterday were not enough to stop the euro slide, which saw the single currency lose out against the majority of its peers, bar a very weak sterling.
Traders are nervous about the very real prospect of the Eurozone as a whole slipping into deflation, with many areas already experiencing such economic conditions. The result has been a continued euro sell-off, over the last week in particular, and an increasingly bleak outlook for the euro. Further EU sanctions implemented on Russia over the weekend are also a worry for the seventeen nation bloc, and are likely to be an on-going factor in the euro devaluing. A relatively bare calendar for data releases this week will mean that markets will be susceptible to external factors, such as the Eurozone’s diminishing relationship with Russia.