Minimal movement for euro yesterday – will big releases today make a difference?

Monday was an extremely quiet day for the euro as it remained relatively unchanged against both sterling and the US dollar. There was no data released all day, and it was a bank holiday in the USA; this meant we saw a very small amount of euro weakness against the US dollar, but generally all gains or losses across the board were minimal.

Early this morning, final German consumer price index (CPI) is released, and forecast to worsen slightly from 0.3%down to 0.2%; dropping even closer to 0% could be a really worrying sign for the Eurozone’s largest economy. Zentrum für Europäische Wirtschaftsforschung (ZEW) business confidence data for Germany, a key release for monitoring business sentiment, is also released today, and forecast to fall from 55 to 53.8.

Even more critical than these German figures, however, is the release of final consumer price index (CPI) reading for the Eurozone. This is expected to tick up slightly – but with the new quantitative easing (QE) in place, most investors would have hoped for a larger increase than we are currently seeing.