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Euro continues to face pressure

Euro continues to face pressure

Yesterday we saw the euro under more pressure, having already lost considerable ground against the dollar and sterling of late. Although the single currency did manage to hold onto the $1.13 mark against USD, it slipped below the 84p mark against GBP. 

Some of the recent euro weakness can be attributed to potential policy divergence between the ECB and other central banks, coupled with rate hikes appearing to occur sooner, and to a greater extent in the UK and US in the coming months. Yesterday it was noted by ECB Governing Council member Schnabel that the pre-conditions for a rate hike are unlikely to be met next year in the Eurozone, which conforms with remarks made previously by ECB President Lagarde.

As we get going this morning, EUR/USD opened in the bottom half of $1.13-1.14, EUR/GBP started below the 84p threshold and GBP/USD got underway just above the $1.35 mark – a positive move having been below the $1.34-1.35 midpoint yesterday.

Looking ahead to today, there is a relatively quiet data schedule in both the US and eurozone with initial jobless claims and the Philly Fed Index being the only releases of note, but neither are likely to impact currency markets unless the results differ hugely from predictions.

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