Euro continues to be driven by USD movements

Matthew Ryan, CFA Ebury

The euro appears to have found a foothold around the 1.19 level on the dollar. The domestic calendar remains extremely light, with the common currency continuing to be driven almost entirely by the broader dollar move - as mentioned, the move lower in USD/JPY is providing a mechanical boost for the EUR/USD exchange rate.

A number of ECB officials are down to speak this week, including members Cipollone, Schnabel and Lane. Yet, with President Lagarde making clear that no change in rates is in the offing for some time, we do not expect their comments to warrant much attention.

Revised Euro Area GDP figures for Q4 will be out on Friday, along wide second tier reports on employment and trade.

We think that the euro will, however, likely take its cue from news elsewhere, notably this afternoon’s payrolls report and Friday’s January CPI data out of the US.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

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