EUR: Will euro continue to fortify its position against sterling?

Yesterday saw data released from Italy, France and Ireland, but the most important release of the day was German Consumer Confidence, which came in worse than expected.

European Central Bank (ECB) President Mario Draghi spoke in Germany – where he defended his monetary policy to German lawmakers. Despite the worse-than-expected German data and the scrutiny placed on the ECB’s policies, the euro actually ended the day relatively flat against sterling due to comments from the Bank of England suggesting that lower interest rates in the UK could be round the corner.

Today sees yet another busy day for data releases. Lower tier information from Portugal, Belgium, Italy and the Eurozone will be released. Higher impact data to watch out for includes German unemployment data and Spanish Consumer Price Index (CPI) figures. Any deviations from the expected figures could lead to volatility in the markets, especially given the politically sensitive nature of employment and its possible effect on the upcoming elections in Germany.