020 7898 0500The euro adopted a negative trajectory yesterday as the Eurozone’s economic outlook worsened slightly. Its movement against sterling was compounded by the positive data releases from the UK. The day began poorly for the single currency when Spanish unemployment data came through worse than expected. Unemployment has been a consistent problem throughout Southern Europe and figures showing an increase of 87,000 unemployed people over the previous month have undermined the notion of a sustainable Eurozone recovery. Further negativity came as revised Eurozone forecasts were released detailing lower growth and higher unemployment. As the lag in growth from the Southern European states seems to continue to stall the seventeen-nation currency in the short-term, investors will look to Thursday’s European Central Bank (ECB) decision to influence trading activity in the medium-term. Predictions from some major institutions suggest that we could see the ECB reduce the minimum interest rate in November or December, further weakening the euro. In the meantime, Services Purchasing Managers Index (PMI) data is released from Spain and Italy this morning. Call your trader now to stay on top of volatility in euro pairings.
