Despite euro movements remaining limited yesterday, we did see the single currency depreciate to its weakest point since January 2013 against a resurgent sterling. Meanwhile, the euro saw a degree of volatility against its US counterpart throughout the day, but net movements were negligible.
The two notable events of the day for the Eurozone failed to have a notable effect due, it seemed, to their contrasting influences. While both sets of Economic Sentiment data indicated optimism in their respective regions, the data for Germany revealed a more downbeat picture, whereas figures for the Eurozone as a whole were better than expected.
While we are not expecting a great deal in the way of Eurozone data today, it is worth taking note of the day’s events in the UK, which may have a considerable impact on the sterling-euro rate. There is also potential for discussions at the World Economic Forum in Davos to influence the currency markets as key economic figures from around the world gather to discuss how to nurture the seeds of economic recovery that have been sown recently.
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