The euro started last week at a one-week high against the US dollar after weaker-than-expected US May durable goods orders data fuelled doubts about the US economy. This also led to speculation surrounding the Federal Reserve’s aggressive rate increase outlook and the possibility that the Eurozone could be matching or even bettering it. This eased after Draghi’s remarked that policy-makers had not discussed scaling back its massive bond-buying programme. He reinforced this by stating that super low rates create jobs, foster growth and benefit borrowers, ultimately easing inequality.
Friday also saw unemployment in Germany, the Eurozone’s largest economy, rising by 7,000 to 2.547 million in June. It was the first increase in u since March last year compared with the consensus forecast by economists of a 10,000 decline. However, as predicted, the unemployment rate was steady at 5.7%.
A hugely busy week on the data front for the Eurozone with key PMI, employment and retail data being released. The Eurozone has been enjoying a flow or positive data, hence the questioning over a possible reduction in their programme of quantitative easing or increase in interest rates. If these figures show some slippage from expectations the euro could be undermined.