It was a net negative week for both the euro and the Swiss franc as price action seems to have been mostly driven by broad risk sentiment, counter currency flows, and an arguably net negative round of economic and business sentiment updates from Europe.
Euro area annual inflation down to -0.2% – Euro weakness was likely sparked by this economic updates at this was the first time we’ve seen a negative inflation read since 2016. This puts pressure on the ECB to increase stimulative measures, i.e. likely increasing their bond purchasing program.
Both the euro and the franc fell during the Tuesday session, possibly falling on the broad positive risk sentiment environment (continued strength from the U.S. tech sector), but also on euro weakness after a disappointing inflation number (likely sparking speculation of more stimulus ahead).
Every day, I will present to you my findings and daily commentaries on what recently happened in the economic arena, possible shifts in sentiment, economic events to watch out for, and their effects on currencies.