Euro has a poor day – but still manages to push higher against sterling

The euro had a mixed day on Tuesday, moving slightly lower against the majority of currencies, including the US dollar but made fresh highs yet again against sterling. The gains against sterling were down to weakness in the British currency, after Mark Carney announced that interest rates were unlikely to rise anytime soon.

Overall, despite these gains, it was a fairly poor day for the single currency, thanks to a report showing that German economic sentiment had deteriorated this month – on top of the strain of the recent struggle in the global financial markets. Importantly though, a separate report for the Eurozone confirmed that the annual rate of inflation in the euro area came in at 0.2% in December, in line with the forecasted figure.

This morning, producer price index from Germany is released, and expected to fall slightly lower than the previous figure from -0.2% to -0.4%. Apart from this data, we expect the euro markets to be fairly quiet, with investors likely looking at other markets.