The single currency strengthened steadily against sterling and the US dollar for the early part of this week, moving slowly away from previous levels. In general, there was not a lot of data from the Eurozone this week and rate movements came largely as a result of events elsewhere. However, this changed yesterday when the euro weakened sharply in response to a Portuguese bank missing repayments. This served as a reminder to investors that the Eurozone recovery is very much in its infancy and caused a decline in support for the eighteen-nation currency. By the close of play yesterday the euro had wiped out the gains that had been made earlier in the week.
Another key development seen this week was European Central Bank (ECB) President Mario Draghi’s speech on Wednesday, in which he expressed a desire to increase central governance in the Eurozone and fundamentally redefine its relationship with the ECB. Whilst there were no immediate effects on the single currency, this is likely to become a more pressing issue in the long-term and have implications for the euro’s performance.
Today holds little in the way of data releases, but markets will continue to react to the events in Portugal yesterday. Any further development have the potential to provoke additional reaction from traders.
If you are looking to buy or sell euros, we suggest contacting your trader now for live rates, news, and currency-purchasing strategies.