The euro began the day yesterday fairly weak but closed higher. This morning, the euro is making modest gains. Looking at recent data from the Eurozone, producer prices (input inflation) was lower than expected while the Sentix Index (a monthly survey of 1,600 financial analysts) was also lower than expectations. In political news, Reuters is reporting that German coalition talks will start next week if SPD members agree to the plan. The leadership of the party has already agreed to begin talks with Angela Merkel's CDU/CSU party. Our short-term and medium-term outlook on the euro remains bullish.
The EUR/USD exchange rate is now trading above 1.1870. Looking at EUR/JPY, the pair is up today and is currently trading just above 133.70. The euro is up against the pound, with EUR/GBP now trading above 0.8830.
This week’s Eurozone events and economic data includes PMIs, Eurozone GDP, and producer prices. Eurozone producer prices missed expectations (2.5% vs. 2.6% expected). Later today, we’ll see Eurozone Markit Composite PMIs and Retail Sales. On Wednesday, a non-Monetary ECB meeting is scheduled. Thursday is the most important day, and we’ll see Q3 Eurozone GDP growth. On Friday we’ll see German trade figures. Last week, Eurozone inflation and consumer confidence accelerated.