Apart from a brief mid-morning rally it was downhill all the way for the EUR on Tuesday. Yet again, it fell against every major currency with its biggest losses against the AUD and NZD (-0.5%) but down -0.4% against the USD and 0.1% against the GBP. EUR/USD fell to a low of 1.1720; matching its lowest point in 3-weeks whilst EUR/CAD dropped to 1.5092.
This morning has brought another set of decent, albeit lower-tier, economic numbers in the Eurozone. Industrial production rose 0.2% m/m in October, slightly above the consensus, 0.0%. The annual rate was pushed up to +3.7%, from a revised +3.4% in September, also above the market consensus. The headline was boosted by a jump in Irish production as well as higher output in France, Spain and Italy. Small falls were seen in Germany and Portugal. Across sectors, the main boost came from stronger output in non-durable consumer goods and energy production, offsetting weakness elsewhere.
On the political agenda today, European Commission President Juncker and European Council President Tusk are scheduled to brief members of the European Parliament about Brexit negotiations ahead of the EU Economic Summit in Brussels on Friday.
Tomorrow morning we’ll get the ‘flash’ December PMI’s and there’s an ECB Council Meeting at lunchtime at which new staff economic projections going out to 2020 will be unveiled. A Bloomberg survey of analysts conducted last week shows only two banks expect the ECB to raise rates before December 2018, so tomorrow’s meeting should be pretty uneventful.
The EUR opens in North America this morning at USD1.1745 and CAD1.5100.