The common currency had a busy day yesterday. Initially punished by poor German Business Climate data, the worst since October of last year, the euro weakened against other major currencies, its fate hung in the balance as investors anticipated the afternoon’s speech by European Central Bank (ECB) President Mario Draghi. The ECB has provided additional forward guidance in its recent communication. It has been made clear that it wants a slightly weaker currency to stimulate growth within the Eurozone. However, Draghi’s words yesterday were seen as too weak by markets. Although he once again hinted at the possibility of negative short-term interest rates, it is a familiar promise, and investors did not appear to place too much stock in it. Therefore, the markets appeared to ignore the ECB’s lacklustre goal of weakening the euro, and the common currency bounced back up following Draghi’s speech, in the absence of strict or additional measures to keep it down.
Today is calm with regards to data releases, with not a single statistic of note to be published out of the euro zone. On the other hand, there is potential for significant relative movement as the market is still digesting the events of yesterday, in addition to significant data releases from the United States.
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