This currency update looks at some of the factors that could affect Euro exchange rates in the near future.

Euro inflation overshadowed by terrorist attacks

The Euro took a degree of losses yesterday following the Paris attacks on Friday night but the reaction so far has been somewhat muted, which is an appropriate market response to terrorism. With France in a state of emergency and anti-terrorism raids continuing to take place, the Euro is likely to remain under pressure. France has responded stating “we are at war” and has retaliated by bombing targets in Syria on a massive scale.

The French prime minister stated on radio that “We know that more attacks are being prepared, not just against France but also against other European countries”. The markets are still digesting the news but expect high volatility to continue for Euro exchange rates.

The Eurozone did receive welcome news in the form of stronger inflation numbers released yesterday although it wasn’t sufficient enough to dent the rates under the circumstances. EU inflation picked up to 0.1% for the year but the figures remain very weak and well below the ECB target of 2%. Until things clearly improve this is very much one area of weakness for the EU.

There is only one economic release for the Eurozone today in the form of ZEW Economic sentiment survey. The release is a good overall barometer of optimism in the EU and can create some interesting market reactions.

I hope you found my Euro currency update helpful, if you have any questions about Euro exchange rates and would like to speak with me directly, please call 00 44 1494 725353 or email me at


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