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Euro daily update for 3rd October 2017

BY DEB SHAW | 

The euro continues to sell off this week, following the drama of the independence referendum in Catalonia over the weekend. Yesterday, ECB chief economist Praet called for a more cautious approach when considering changes to QE in a speech. Recent indications from the ECB are dampening the market's expectations of future interest rate hikes, thus leading to continued euro weakness. Spain-related stocks and bonds also suffered yesterday given the events in Catalonia. 

EUR/USD is now trading just above 1.17. The pair last traded at similar levels back in August this year. EUR/JPY has been flat for several days in a row now, with the pair currently around 132.40. 

In economic data, yesterday's manufacturing PMIs and unemployment figures both missed expectations (but to a very small degree). Unemployment came in at 9.1% vs. 9% expected while Markit manufacturing PMIs came in at 58.1 vs. 58.2 expected. Later today, we'll get producer prices. Finally, on Thursday we'll see Markit composite PMIs and Eurozone retail sales figures. 

Updated 
Outlook
Bearish

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