Euro falls again after taking a breath during Asian trading

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14 July 2017

Matthew Ryan

Senior Market Analyst at Ebury. Providing expert currency analysis so small and mid-sized businesses can effectively navigate international markets.

The Euro continued trending downwards against almost all G10 currencies. Yesterday’s inflation data from main Eurozone countries wasn’t a game-changer. German CPI inflation rose by 1.5% in June, unchanged from the preliminary inflation print.

T
he only important datapoint we’ll be given today is Eurozone’s balance of trade. However market focus should be on the US inflation releases, especially considering the recent slowdown in price growth which makes some investors question FED’s willingness to raise rates at the expected pace in the future.

Sterling continues to rise after yesterday’s boost

Yesterday’s upwards surprises in job market data continued to boost for Sterling. After stabilizing during Asian trading the Sterling continued trending upwards yesterday, rising against major currencies. Once again, the Pound appreciated the most versus the Euro, which was sold-off in the broad market. Today is a very light day in terms of the macroeconomic data from the UK, investors will most likely focus on the numbers coming from the other side of the Atlantic.

Chair Yellen mentioned fiscal uncertainty during yesterday’s speech

Producer prices rose 1,9% on annual basis in June, but this number is seldom a market-mover and yesterday was no exception. Another round of Yellen’s grilling before Congress, this time: banking committee, was rather lacking in the kinds of details currency markets are looking for. During the speech FED’s chair mentioned the uncertainty regarding the fiscal policy, indirectly reiterating what markets already know – that prospects of moving forward with any fiscal stimulus from the compromised Trump’s administration are currently unknown.

Today we await inflation and retail sales numbers from the US.