Euro weakens following Poor German data and fears over Portuguese banking crisis

The euro performed poorly yesterday as German ZEW Economic Sentiment data failed to provide any support for single currency. The German index, which is based on a survey of key investors and analysts, was revealed to be the lowest it has been since 2012 and was indeed less than what had been forecast – a worrying sign for the Eurozone’s largest economy. With the US dollar and sterling both performing well on the back of positive developments in their respective economies, the euro reached its weakest point against sterling since the summer of 2012, whilst falling to a 1-month low against the US dollar.

Fears rose that we could be headed for a banking crisis in Portugal yesterday as a proportion of a €900million debt related to Banco Espirito Santo went unpaid yesterday.

Today is set to be a quieter day on the Eurozone data front. However, there is a hive of activity on the global stage and further rate movements are likely as traders continue to react to yesterday’s spikes.