Middle-East tensions 'bring Euro back to earth'
Last week was very quiet in terms of news from the Eurozone, and this one will be no different.
The euro initially soared in response to weak inflation in the US and some relatively hawkish comments from a handful of ECB officials, which seem to suggest that the bank is in no hurry to cut interest rates again.
The start of the Israel-Iran conflict did, however, bring the euro back down to earth, and it is hard to see any catalysts that will help the common currency take the next leg up, at least this week.
Data on exports and industrial production is being distorted by the export surge to the US ahead of the tariffs, and the subsequent slump. This means that it will be a few weeks yet before we get a clear picture of their impact on the Eurozone economy.
With no real major data out this week, attention will again be on speeches from a handful of ECB officials in the coming days, including President Lagarde on Thursday.
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.
