Bad news for the euro can’t stop the single currency strengthening against a weak sterling

The euro had a mixed day on Tuesday as it strengthened against an underperforming sterling and weakened against the US dollar. The weakness against the American currency (and all other major currencies) was largely down to the much worse than expected ZEW German business confidence data. It was anticipated to fall, given the circumstances around the UK’s vote to leave the referendum but the actual reading was much lower than forecast – with the figure falling sharply from 19.2 to -6.8.

More negative news is likely to come out of the euro area with the German producer price index released this morning and also anticipated to fall from 0.4% to 0.2%. In the afternoon, European consumer confidence data is released and expected to fall from -7.3 to -8.

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