It was another volatile day on the exchange for those clients holding EUR and as mentioned we saw a nice improvement against Sterling, following the latest Brexit poll. Whether this improvement is sustainable is hard to tell but what is apparent is that both the EUR and GBP remain extremely fragile under current market conditions and both are only a rumour away from further trouble it seems.
The European Central Bank (ECB) have been fairly bullish of late, with President Mario Draghi pointing to the fact that the increased monetary policy programme and a cut in interest rates has helped to alleviate some pressure on the region and ultimately the single currency. This has helped to increase investors risk appetite and the EUR seems to be finding support again, having slipped to 1.32 at last week’s low.
Where we go from here will be dependent on further developments within the Eurozone and its key member states but any problems with Greece for example could seriously damage its slowly recovering image and set it back indefinitely. We will also have to wait for the next UK referendum poll to see whether the Leave camp can continue its fightback.
In terms of hard data, we have a busy week for the Eurozone. Monday’s Industrial & Consumer Confidence figures came in better than expected and set the tone for yesterday’s positive spike. Unemployment data yesterday came out as expected, as did some inflation data, with all eyes now turning to today’s latest Manufacturing figures. However, it is Thursday that prove to hold the most weight with investors, with further inflation data and the latest ECB interest rate decision and subsequent monetary policy statement. Based on the positive vibes the ECB have been giving out as I mentioned previously, any continuation of this will help to solidify the EUR position and possibly give it the impetus to head back under 1.30. We finish the week off with Retail Sales figures, which again are meant to be positive.