Euro Loses Ground by Weekend

Initially, it looked like this trading week would be another week of consolidation for the euro. Yet the shared 18-nation currency lost its ground by the weekend due to combined influence of poor economic indicators and comments from European policy makers.

Comments of European officials hurt the euro at the start of the week. The positive German economic sentiment allowed the currency to gain ground, but this did not last long as the positive data was followed by worse-than-expected Purchasing Managers’ Indexes. They did not break the currency immediately. It is comments of European Central Bank President Mario Draghi on Friday that turned out to be the last straw that removed any hope for the euro to rally.

While the common currency of the eurozone has not entered a full-fledged downtrend yet, the future looks bleak for the euro. It will be interesting to see how the currency will behave next week, which may be decisive for the euro.

EUR/USD sank from 1.2531 to 1.2392 (1.1 percent) over the week. EUR/JPY rallied from 145.97 to 149.13 (the highest level since October 2008) but retreated to 145.88 by the weekend. EUR/GBP dropped from 0.7988 to 0.7912 (1.0 percent).

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