Euro under pressure

Euro foreign exchange rates are under pressure

In today’s trading session, the common currency is trading under pressure against the majors after the ECB Chief, Mario Draghi, over the weekend warned that strengthening of the Euro could compel the central bank to unleash additional monetary stimulus to keep inflation from falling too low. Also, Benoit Coeure, the ECB’s Executive Board Member, echoed a similar tone and stated the central bank might consider asset purchases as one of the tools to fight low inflation in the Euro area. Against this backdrop, this week’s final reading of consumer price inflation will be eyed and is likely to confirm that inflation eased in the currency bloc, given that data released last week indicated that consumer price inflation slowed in most of the Euro area’s peripheral economies. Additionally, today’s Euro zone industrial production and US retail sales data, along with tomorrow’s German ZEW sentiment indices, will keep the Euro-US Dollar investors on their toes.

Euro buyers may well, therefore, see a far more attractive market going forward. For now, however, we remain range bound.

Key Economic Events

• UK Markit Services PMI
• UK Official Reserves
• US Trade Balance
• US IBD/TIPP Economic Optimism
• US FOMC Member Stein Speech
• Eurozone Markit Services PMI
• Eurozone Markit Composite PMI
• Eurozone Retail Sales
• Eurozone EcoFin Meeting
• Spain Unemployment Change