The Runaway Euro Train

The Euro keeps going from strength to strength. Despite a small setback yesterday following Luxembourg Prime Minister Jean-Claude Juncker’s comments that the Euro is “dangerously high”, the common currency returned to its advance today. GBP/EUR had managed to hold at 1.2010 earlier in the week and began to recover slightly yesterday, however this morning the pair broke below this level hitting a daily low of 1.1980. Following the bullish comments by Mario Draghi last week regarding the Eurozone, a drop in Spain’s borrowing costs this morning after the sale of 4.5 billion Euro bonds further catalysed the Euros strengthening. This has also led to EUR/USD pushing back up to 1.3350+ this morning, heading back towards the heady heights of 1.34 which we last saw on Monday, when a new 11 month high was established.

There is very little economic data out this morning other than employment figures coming out of Australia. The Australian Employment Change for December was recorded at -5.5K, a substantial decrease from the previous month and well below market expectations of 2.3K. This led to the Aussie Dollar dropping off against the Yen and AUD/USD also dropped off, recording a daily low of 1.0493 immediately following the data release.

Markets will have to wait until this afternoon for the next instalment of economic data, in which we will see figures from the US regarding Housing Starts, Building Permits and Initial Jobless Claims. Whilst the data this afternoon could well stoke some movement in the markets, it is likely that any substantial moves will be delayed until after crucial data is released in China tomorrow. In the early hours of tomorrow morning Chinese GDP, Industrial Production and Retail Sales figures will be released and could spark significant market movement.

Mark Webster