The euro had a better day on Wednesday after a difficult series of days as it managed to edge higher against the US dollar, pulling back from close to seven-month lows as monetary policy expectations and now political upheaval in Portugal had put pressure on the single currency. The problem in Portugal arose after its Government collapsed after two weeks in power. The opposing left-wing party rejected its proposals in parliament as there was uproar over the proposed austerity measures. This has thrown the country into turmoil and contributed to recent euro weakness.
Today may be an important day for the euro. Inflation data in the form of a Consumer Price Index (CPI) from Germany has already been released earlier this morning. This was forecast to improve from -0.2% up to 0%.
Today’s industrial production data from the Eurozone will also be a key release this month. It is expected to edge higher from last month’s figure of -0.5%, up to -0.1%. However, the majority of investors will be listening closely to European Central Bank (ECB) President Mario Draghi, who is speaking today. Any indication on further loosening of monetary policy or timescales on when monetary policy could be altered is likely to have a negative effect on the single currency.