The Euro
With only low tier economic events from Europe, it’s no surprise that euro pair price action was mixed and more driven by global risk sentiment & counter currency influences.

Major Market Drivers for the Euro
Global risk sentiment was an influence on euro pairs this week, and for a broader rundown of what drove global risk sentiment, check out my review of this week’s risk sentiment drivers and its effects on market behavior in my Japanese yen weekly review here.
In short, global risk-off sentiment early in the week is likely the reason why we saw the euro’s performance against the safe haven lag versus the high-yielders/comdolls. And vice versa at the end of the week when traders were generally positive on risk, the euro underperformed against the high-yielders while out performing the safe haven currencies (JPY, CHF, & USD) at the end of the week.
Europe’s economic calendar was heavy on low tier events, so it’s no surprise that most couldn’t really be tied to uniform changes in volatility or directional biased moves. The one arguable period of exception was Thursday’s London session price action where the euro uniformly fell against the majors. Much weaker German retail sales data (-4.3% vs. 1.4% in the previous month) was the likely catalyst for the bearish sentiment, followed by a string of arguably net negative European data (most notably the weaker-than-expected German unemployment data)
A few hours later, the euro fell broadly once again, this time possibly on dovish comments on the European economy from Bundesbank President Jens Weidmann. He presented a gloomy outlook on Europe and basically made an argument for traders that the ECB is more likely to bring further stimulus rather than normalize monetary policy, as previously expected before data started turning down at the end of 2018.
European Headlines and Economic data
- Euro zone lending growth defies gloom, M3 jumps in December: ECB
- EU has a Brexit message for May: Irish backstop is our red line
- ECB’s Draghi warns that uncertainty is weighing on sentiment
- ECB can restart QE if needed but unlikely this year: Draghi
- The GfK consumer sentiment indicator for Germany rose to 10.8 heading into February 2019
- German retail sales slump at fastest rate in 11 years
- German Unemployment Declines Less Than Expected In January
- Spain CPI Inflation Slows For Third Month In January
- GDP up by 0.2% in the euro area
- Euro area unemployment at 7.9%
The Swiss Franc
Tough week for the Swiss franc as it not only took hits as broad risk sentiment went positive into the weekend, but we also saw a rare week of economic drivers from Switzerland.

Major Market Drivers for the Swiss Franc
As mentioned in the euro recap above, global risk sentiment started the week in the “off” position, likely the reason why we saw the franc’s performance against the high-yielders/comdolls outperformed against the safe havens through Tuesday’s trading session.
Traders flipped back to risk-on from Wednesday to the end of the week, and the Swiss franc flipped as well where its underperformance against the high-yielders was much greater that its underperformance against the safe haven currencies (JPY, CHF, & USD) at the end of the week.
Noticeably, it was not a good week all-around for the Swiss franc, which is likely due to this week’s economic data releases from Switzerland, all coming in below previous reads to signal a weakening Swiss economy ahead. Starting with the much weaker-than-previous Swiss trade balance data on Tuesday (CHF 1.79B Dec. vs. CHF 3.0B Nov), Swiss franc pairs began to decline, which can be seen in its performance relative to the euro in the overlays against USD and JPY below:


While the franc’s movement did correlate closely with the euro as with most other weeks, it’s clear traders priced in the gloomier outlook that was later seen in the week with the latest KOF Swiss Economic Institute survey and retail sales data, separating the degree of performance between the franc and euro against the other safe haven currencies.