Thursday was another relatively quiet day in what has been a modest and mixed week for the euro. On Thursday German IFO business sentiment data reported that its Business Climate Index fell to 108.7 this month. Down from 109.0 in November and below forecasts of 109, this had limited impact on the Eurozone currency.
The euro struggled against the US dollar following the US Federal Reserve’s decision to raise interest rates. Given that the euro-US dollar pairing is the most traded currency pair in the world, the single currency was always going to struggle in reaction to an interest rate hike.
The Eurozone currency has had a fairly stagnant week against sterling, only strengthening slightly. This seemed to be down to sterling weakness rather than euro strength.
French business sentiment data was released yesterday night and it was expected to fall slightly from 102 to 101. However it surprised markets by increasing to 103. Other than this we can expect a quiet Friday and run-up to Christmas from the Eurozone. As always, though, surprises can happen to shock the markets.