Euro gives back post-election gains as risk aversion and Payrolls report lift the Dollar

Matthew Ryan, CFA Ebury

The Euro rose on the dollar’s post-election dip but gave those gains back on Friday as risk aversion and the payrolls report lifted the Dollar.

French fiscal worries remain the main drag, and large street protests in France Thursday were a reminder that the budget fight is far from over.

Last week’s inflation figures contained no surprises, but the 4% headline number, double the ECB’s target, maintains the pressure on the central bank to hike at least once more in December.

Friday’s flash GDP and speeches from ECB officials Cipollone and Schnabel are the main events to watch. The euro is likely to trade as a risk sentiment currency while equities remain unsettled.

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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