The euro has stayed out of the limelight for the most part of this week as limited and mixed data releases have failed to have a notable influence on its performance. However, this proved to be the quiet before the storm when the euro bucked the trend on Thursday. The single currency appreciated sharply against its major peers in response to a host of data releases that exceeded expectations. Both French and German Manufacturing figures were better than expected, with the pace of growth really picking up in Germany, Europe’s largest economy, and levels of contraction falling in the French manufacturing sector.
Meanwhile, Eurozone Current Account data revealed a surplus of €23.5bn for November, which again far surpassed expectations. A larger surplus is beneficial for the currency as this means that there is a greater demand for euros from foreign buyers, which boosts euro strength.
In terms of key levels, the eighteen-nation currency reached fresh lows against sterling on Wednesday, dropping to its weakest point since January of last year. However, Thursday’s strong performance from the euro means that the majority of the ground made by sterling during the week was relinquished by the close of markets in London.
We could see further movements in euro pairings today as investors continue to react to yesterday’s data. Spanish Housing Price Index figures and Belgian Business Climate data could also have a moderate impact on performance.
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