The euro struggled on Friday, despite monthly inflation figures showing a marginal increase from last month. The slight up-tick in inflation did little to dampen investors’ views on the euro. With data released on Friday showing unemployment in the Eurozone remains at 11.5%, close to record highs, expectations mount that the ECB will be forced to further ease monetary policy in the near future to prop up the Eurozone’s economy. Euro weakness combined with US dollar strength caused the euro to weaken to fresh two-year lows this morning.
Looking forward to this week, we have a raft of PMI (Purchasing Managers’ Index) figures for the manufacturing and services industries across the bloc over today and tomorrow. The figures are from a monthly survey of business managers, regarding their general sentiment towards industry conditions, and are a good indication of how the relative economies are performing.
The key release this week will be the ECB (European Central Bank) monthly monetary policy meeting. Market commentators suggest that monetary policy will be kept on hold this week, although pressure continues to mount on the ECB to take further action to help the Eurozone’s economy. If we see no change in policy, the focus will be on the following press conference as investors look for hints as to when the ECB could take further action.