This week has seen relative calm for the euro, after a busy few weeks. Despite a lack of a ‘flash crash’ or significant political instability, there was still activity in the form of key data releases.
Monday saw the Consumer Price Index rise to 0.4% – the highest it had risen in nearly two years. Tuesday was quiet (with only short-term bond sales in Spain), and Wednesday saw only a German long-term bond sale and a drastic fall in Belgium consumer confidence.
Yesterday saw the most activity of the week, with the European Central Bank (ECB) keeping its headline interest rate and deposit facility rate at 0% and -0.4% respectively. Draghi made his second speech of the week, suggesting that the current ECB quantitative easing (QE) policy would not end next year (when it is due to finish), and that tapering would happen before QE policy was eventually dropped. The leaders of the ECB also began their summit. Overall the euro fell slightly against both sterling and the dollar, partially due to movements in other markets, but also due to the implication of the ECB continuing to increase the money supply through its QE program.
Today sees German Bank president Weidmann make his second speech of the week. We will also see the Greek current account information, Belgian business climate and EU consumer confidence data, though these are low-impact releases. The main point of the day will be the speech after the completion of the EU leaders’ summit.