After a disappointing week last week the euro begun a small recovery as it strengthened against both sterling and the US dollar. Most of the gains made against the US dollar were erased on Thursday, despite it performing well earlier in the week.
Thursday was a key day for the single currency, with euro weakness down to European Central Bank (ECB) President Mario Draghi’s comments as he warned that inflation is likely to remain low for some time. The ECB revised its inflation forecast to 1.3% for 2016, and to 1.6% for 2017. Strength against sterling has again been largely down to the looming UK EU referendum vote. Draghi said he believes that the UK should remain in the EU, but that the ECB is ready for any outcome.
Composite PMI figures for the Eurozone are expected to fall slightly from 53 last month to 52.9, apart from this the euro markets are expecting a quieter end to a busy week.
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