Last week ended in an uneventful fashion for the euro, with little movement against the US dollar and just creeping below the 1.25 mark against sterling. Claude Juncker, despite strong disapproval from David Cameron and the UK, was named as the new President of the European Commission, although this did not have a notable bearing on the performance of the single currency.
Looking to the week ahead, today sees the release of Eurozone Flash Consumer Price Index (CPI) data, which offers an early indication of expected levels of inflation in the eighteen-nation bloc. German CPI data on Friday had a limited effect as it was very much as expected, but if today’s figures deviate from the 0.6% forecast then we may see more in the way of rate movements. Beyond this, the European Central Bank (ECB) is set to deliver its monthly interest rate decision on Thursday. After rates were lowered to an all-time low last month, we are not expecting to see another change just yet – however sentiments expressed in the following press conference are likely to give rise to greater activity.