The Euro moved 1.6% higher against the U.S Dollar last week being one of the top performers out of the G10 currencies. The pair moved from lows 1.1437 and closed the week at 1.1619 – a 2-week high. The main driver behind the Euro’s strength has been broad US dollar weakness following Trumps criticism last week on the Federal Reserve’s Chairman’s decision over its higher rates policy. Trump is after a lower Greenback and believes the Dollar is getting far too expensive.
On the data front, the preliminary August Markit PMI for the EU indicated that the economy continued to grow edging higher from 54.3 in July to 54.4 in August. Consumer confidence fell to -1.9 in August, from -0.5 in July. It was the fourth consecutive monthly decline, taking consumer confidence to its lowest in 15 months.
Looking ahead, the calendar is quite busy this week with German and EU CPI the most notable. Todays see German Ifo Business Climate change which is based on surveyed manufacturers, builders, wholesalers, services, and retailers. The recent momentum in Germany’s Ifo survey suggests further downside risks to Germany and by extension Euro-area growth momentum during the remainder of this year. Unless the Ifo index picks up from today’s levels, it indicates further downside risks to current growth estimates for the Euro area.