No love for the euro or Swiss franc this week as price action was once again dominated by broad risk sentiment.
Traders were moving away from low-yielders/safe havens as the pandemic recovery trade continued, the likely main driver for net losses in both currencies.
European Headlines and Economic data
In January to December 2020, euro area exports of goods to the rest of the world fell to €2 131.4 bn (a decrease of 9.2% compared with January-December 2019), and imports fell to €1 897.0bn (a decrease of 10.8% compared with January-December 2019).”
“In December 2020 compared with December 2019, industrial production decreased by 0.8% in the euro area and by 0.4% in the EU.”
“The ZEW said its survey of investors’ economic sentiment showed a rise to 71.2 points from 61.8 the previous month. A Reuters poll had pointed to a fall to 59.6, and the February reading surpassed even the highest forecast, of 68.0.”
“These declines follow a strong rebound in the third quarter of 2020 (+12.4% in the euro area and +11.5% in the EU) and the sharpest decreases since the time series started in 1995”
“Villeroy reiterated earlier this month that the French economy was still on track to rebound 5% this year”
“Villeroy, who is also a European Central Bank policymaker, said Europe should boost the euro’s international role as its use in global foreign exchange reserves amounted to only a third of that of the dollar, while the U.S. and European economies are of similar size.”
“Sentiment regarding output in the coming 12 months rose to the highest since March 2018, improving in both manufacturing and services. Brighter prospects were primarily linked to hopes of successful vaccine roll-outs in the coming months.”
“The positive manufacturing performance came despite a backdrop of increasing supply-side pressures. February saw record reports of delays in the delivery of inputs amid raw material shortages and squeezed transport capacity, as well an associated spike in costs”
“At the sector level, there were contrasting results, with service providers posting another decline in activity while manufacturers saw a modest expansion. Notably, the decline in the service sector was the fastest since last November and sharp overall.”
The Swiss Franc
Swiss Headlines and Economic data