At the start of the week the Euro spent the session little moved due to the absence of any important economic data releases.
As the week progressed the Euro made gains against the Pound after data showed a third-month of improvement to economic confidence in the Eurozone. As forecast by economists, a gauge of consumer sentiment for the 17 nation currency bloc climbed from 91.3 in June to 92.5 in July the best level recorded since April 2012.
Adding to signs of improvement was the release of data showing that manufacturing output expanded in July for the first time in two years. German business confidence improved for a third month and a slowdown in the decline of Spain’s GDP added to the improving picture.
Midweek the single currency rose against the Pound after data showed that unemployment in the Eurozone fell for the first time in two years. The news gave investors added confidence that the region will soon officially exit its longest recession since 1995 and begin to grow.
Thursday the Euro weakened against the Pound and fell from a six-week high against the US Dollar after the European Central Bank decided to leave interest rates at the record low level of 0.5% following signs that the European economy is improving.
The Euro was little changed against US Dollar on Friday morning as the markets were in a holding pattern before the release of key economic data for the USA later in the session. The single currency softened slightly in the morning over concerns about the stability of the fragile Letta government in Italy after Silvio Berlusconi was sentenced to four years in prison for tax evasion. The verdict casts doubt on whether the former Prime Minister will have to withdraw from politics, raising the possibility of a fracture in Italy’s fragile coalition government.
Major events next week for the Euro
Monday 5th August – Eurozone Markit Services PMI
Eurozone Retail Sales
Wednesday 8th August – German Industrial Production
Euro Exchange Rates
(As of 11:45 am GMT)
The Euro is trading against the Pound in the region of 0.8720
The Euro is trading against the US Dollar in the region of 1.3209
The Euro is trading against the Australian Dollar in the region of 1.4844
The Euro is trading against the New Zealand Dollar in the region of 1.6794
The Euro is trading against the Canadian Dollar in the region of 1.3719
The Pound is trading against the Euro in the region of 1.1464
The US Dollar is trading against the Euro in the region of 0.7565
The Australian Dollar is trading against the Euro in the region of 0.6729
