The euro had a good start to the day against sterling and the US dollar on Monday, as overall sentiment for a US rate hike in the upcoming months became more unlikely. It was a very quiet day for the single currency on the data front. Italian business confidence data was released, coming out much better than expected, at 104.2 in comparison to the forecasted figure of 102.7. The euro finally breached the key resistance level against sterling of 1.35, a key level it hadn’t broken since May this year.
Today is an important day for the single currency, with Business and Consumer confidence data due from the Eurozone. Given the strength of today’s Italian figure, it is hoped that the Eurozone data will also be improved; whether the former was sufficient to affect the latter remains to be seen. Germany also releases its preliminary Consumer Price Index (CPI) data; an indicator of inflation, it is forecast to fall to a negative figure of -0.1%, down from 0%. Falling below the zero percent line is a physiological level and is likely to unsettle the single currency yet again.