Currency Note Euro

Slow day for the euro despite some gains over sterling

By Ricky Bean February 23rd, 2016

On the whole, the euro had a disappointing day yesterday – falling more than 1% against the US dollar; it did however make leaps against sterling, before seeing some of those gains erased in the afternoon. The heightened fears over the weekend around a possible British exit from the European Union immediately had a negative impact on the Eurozone when trading began on Monday. This meant that the Eurozone Flash Purchasing Managers Index (PMI) release was generally overlooked, despite figures being slightly worse than expected; 52.7 down from last month’s figure of 53.5. Slowing activity, reduced pricing, falling orders and reduced hiring were all part of the reason for this fall and as such this will increase expectation for positive action being taken at next month’s European Central Bank meeting.

This morning Gross Domestic Product (GDP) figures are released from Germany, and are expected to remain in line with last quarter at 0.3%. At 9am, IFO business sentiment data will also be released from Europe’s biggest economy, and this is also forecast to fall, from 107.3 down to 106.7.