Movements in euro rates yesterday reflected a continuation of general trends over the last few months and the dominance of external influences. The single currency continued to depreciate against the US dollar yesterday, causing the euro-US dollar rate to reach its lowest point in 11 months. As the Eurozone continues to struggle with low inflation and stagnating economies, the USA’s recovery looks evermore steadfast. This contrast has been reflected in the performance of the respective currencies over the last four months, with the euro steadily losing ground against the US dollar. We also saw the euro weaken slightly against sterling as the UK Monetary Policy Committee (MPC) interest rates votes provided a boost to the UK’s currency.
Today sees the first data release of note this week from the Eurozone, in the form of monthly Manufacturing data from France and Germany. These figures are a useful gauge of economic performance and often have a sharp impact on exchange rates when results differ from expectations. Current forecasts suggest contraction in the French sector and moderate growth for German Manufacturing.