Major Market Drivers for the Euro
After a slow start, there was a general bearish tilt in the euro early in the week which could arguably attributed to concerns of a Eurozone recession ahead as a recent string of European data has been weak. First, we saw European industrial production data on Monday drop sharply by -1.7% (the most in three years) in November, and then a decline in trade surplus with the rest of the world going from 23.4 billion euros in November 2017 to 19.0 billion euros in November of 2018.
After these reports and a small decline among euro pairs during the Tuesday morning London session, forex traders turned their attention to other market themes as that is when euro pairs started to diverged in price action.
Positive U.S.-China trade headlines and the Fed keeping rate hikes at bay likely contributed to positive global risk sentiment (easy money conditions usually motives traders to seek riskier plays) and supporting the euro higher against JPY and CHF. Those same themes are also likely what propelled the Greenback and Aussie to end the week higher against the euro as well.
The Kiwi and Sterling were the strongest movers against the euro, the former finding sellers on weak housing sales data in New Zealand. While the pound was the main focus for currency traders all week due to the parliamentary vote on Theresa May’s Brexit deal with the European Union, which eventually
Euro Headlines and Economic data
- Euro zone trade surplus declines in November, energy imports rise
- Eurozone industrial production suffers sharpest fall in almost three years
- Annual inflation down to 1.6% in the euro area – eurostat
- Production in construction down by 0.1% in euro area
- Draghi Says No Recession Ahead for Euro Area Despite Weakness
- German consumer prices fall sharply in December
The Swiss Franc
It was another tough week for the “safe haven” currencies, and the Swiss franc was once again no exception as it easily lost out to most of the other major currencies.
Major Market Drivers for the Swiss Franc
The Swiss franc had a lone economic data report this week from Switzerland in the form of the monthly change on producer price index, which fell by 0.6% in December. This was not a market mover for the franc, though, so it appears that once again price action was dictated by euro movements, global risk sentiment, and the same counter currency influences described in the euro review above.