Yesterday was not a particularly eventful day for the single currency as we saw no data releases of note and only relatively gentle rate movements. We saw the single currency lose some ground against sterling and the US dollar.
The outlook for the Eurozone remains downbeat as relations with Russia remain frosty and even its largest economy seems to be faltering. German data has consistently had a strong bearing on euro performance given the nation’s importance in the pursuit of a sustainable recovery in the eighteen-nation bloc and today’s Economic Sentiment data could cause sharp rate movements in the short term. These figures are derived from a survey of key investors and analysts in Germany and may come out at their lowest point since 2012 as a result of looming sanctions on trade with Russia, murmurs of a slowdown in growth during the last quarter, and increased conflict in the Middle East darkening the mood generally. A very low reading is likely to cause the euro to weaken further. However, if figures climb above the forecast index of around 18 then we could see some support for the single currency.