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Euro gains as stock markets rebound - Euro currency news daily

25 April 2017, 12:42 CET
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As markets reopened at the start of this week we saw the euro strengthen to a 5 month high. This rally was seen in European stocks yesterday as we saw European equities strengthen across the board. Investors have regained faith in the European markets for the time being with risk sentiment falling away. This relief has come from the results of the first round of voting in the French Presidential election, which was previously seen as a major source of risk for the EU as an entity. As this risk-off approach is taken we may see the euro continue to strengthen this week. German business sentiment was released yesterday with business confidence moving to a multi-year high of 112.9. This will give the Eurozone more confidence in their economy with a many calling for an easing of monetary policy. As plans for a Greek bailout also continue to develop we could certainly see a strong week for the euro. As the Italians enjoy a bank holiday and with no major releases from the Eurozone we will expect markets to be moved by global sentiment and any shock political announcements. GBP/EUR is currently trading at 1.1759.

US Dollar

The US calendar started slowly this week with only minor releases having very little impact on the market. As risk sentiment eases from global markets we have seen a small sell off of USD causing the currency to retreat slightly at the beginning of this week's trading. This risk off approach is likely to motivate markets for the remainder of the week so we could see USD fall away further. The main focus this week will be on the Trump administration and their plan to outline the framework for major tax reforms. This announcement is scheduled for Wednesday and is likely to discuss the plan to cut corporate tax from 35% to 15%. Although this will be a very basic outline of the reform to come, it will give the markets something to digest and will allow congress time to discuss key issues. Today we will see a number of data releases from the US with the headline figure being CB Consumer Confidence which is due to fall from 125.6 to 123.7. New Home Sales is also due to fall from 592K to 590K. Poor data here could act as a catalyst for an already wavering Dollar.

Little data from the UK for investors to work off yesterday caused markets to be motivated by global sentiment and political tensions. The French election caused sterling to fall dramatically against the euro but the pound was able to remain strong against the rest of the major currencies. Risk sentiment on a global scale has fallen away and sterling may be able to capitalise this week. This morning will see Public Sector Net Borrowing figures released which is due to rise from 1.1B to 2.6N. The main focus this week will be on Saturday's meeting of EU leaders where they will discuss a strategy for Brexit negotiations with the UK. EU leaders have stated that the UK should not assume that they will be granted a free trade deal including industries such as finance. We could see EU leaders take a fairly firm stance to negotiations, potentially outlining a plan which would state that the UK must comply with a number of key EU rules in order to access the single market. This approach could be used not only to begin negotiations with the UK on strong footing but also to act as a deterrent for other EU nations considering their own referendum. With a contentious French election in the balance, which could prove to be detrimental to the EU, leaders of the Union will be keen to use this meeting, on Saturday, to curtail any source of risk. GBP/USD is currently trading at 1.2808.

Aussie and Kiwi Dollars

A bank holiday is scheduled for today in Australia and with very little data released yesterday markets will be motivated by global sentiment. This morning we have seen the AUD retreat across the board, this will likely be a reaction to a global risk-off approach to investment and this trend may be sustained. New Zealand also has a bank holiday today. We have seen a very slow start to the week for the Kiwi Dollar with no data of note to discuss. We have seen a small sell-off of the NZD this morning with the currency falling across the board. Investors will look to wider economic and political events for movement here. GBP/AUD is currently trading at 1.6985. GBP/NZD is currently trading at 1.8408.

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Document Actions
Eurozone Economic Calendar

Sunday 23 April

24h IMF Meeting

Thursday 27 April

10:00 Industrial Confidence (Apr)
10:00 Business Climate (Apr)
10:00 Economic Sentiment Indicator (Apr)
10:00 Services Sentiment (Apr)
10:00 Consumer Confidence (Apr)
11:45 ECB Interest Rate Decision
11:45 ECB deposit rate decision
12:30 ECB Monetary policy statement and press conference

Friday 28 April

08:00 Private loans (YoY) (Mar)
08:00 M3 Money Supply (3m) (Mar)
08:00 M3 Money Supply (YoY) (Mar)
09:00 Consumer Price Index (YoY) (Apr) (Preliminary release)
09:00 Consumer Price Index - Core (YoY) (Apr) (Preliminary release)
19:30 CFTC NC net positions

Saturday 29 April

n/a EU leaders summit