Euro undermined by disappointing economic data

The euro weakened moderately against major peers yesterday in response to weaker than expected manufacturing data sets and comments from the European Central Bank (ECB) president Mario Draghi. Both German and French manufacturing data were worse than expected with the French figures showing contraction and the German figures showing less growth than expected. Draghi disclosed that he was prepared to implement another Long-term refinancing operation – which essentially means another spate of lending to the banks of the Eurozone – in order to maintain current monetary policy. Such an operation, if implemented, would have a negative effect on the single currency. However, the market reaction was moderate as Draghi remained very non-committal and the single currency did not depreciate as much as it could have done. This morning important German business climate data is due to be released giving an update on the pace of recovery in the Eurozone’s largest economy. Call your trader now to see how investors react to the data.