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EUR: Grexit concerns euro

By Smart Currency February 8th, 2017

Despite a relatively quiet day in terms of scheduled European data releases, yesterday was a volatile day for euro (EUR) markets. German industrial production data fell far below expectations and showed a decrease in activity. While French trade data was largely as expected.

There was also an unexpected release from the International Monetary Fund (IMF) which stated Greece was highly unlikely to meet the required budget surplus, a scenario that could result in the nation losing out on further debt relief. This brought back the idea of a Grexit, an issue that has not been on investors radar for some time. The euros fortunes were hampered further by uncertainty surrounding the upcoming French elections. Consequently, there were large movements in euro markets, with the euro gaining against the pound (GBP) in intraday trading, before falling back and eventually losing ground. The euro also fell against the dollar (USD) despite performing a late rally.

A German 10 year bond sale and Spanish industrial production figures are the main highlights today. The European Union economic forecasts are expected, though this is not a confirmed release. None of these are high-tier data releases, but any further news on the upcoming elections around Europe or further news on Greece could cause significant volatility for the euro.