The euro bucked recent trends in the early part of this week, making gains, albeit moderate ones, against both sterling and the US dollar. Despite this, yesterday’s shaper rate movements in the opposite direction reversed this. In general, data releases from the Eurozone have had a muted influence this week, as trader activity and events elsewhere have provided stimulus for rate movements. We are likely to see this change as data releases start to provide a more clear-cut picture of how European Central Bank (ECB) President Mario Draghi’s recent policy changes are affecting the recovery of the eighteen-nation bloc. However, this week the figures have been mixed and largely predictable.
One set of figures that do have the potential to have a greater impact on the euro’s performance are today’s German Consumer Price Index (CPI) digits. CPI is a key indicator of inflation, and as Draghi’s recent policy changes were taken in response to falling inflation levels, these will likely play a role in determining future Central Bank Policy.