Euro rebounds after disappointing data releases in the US

Enrique Díaz-Álvarez17/Mar/2015Currency Updates


Sterling soared against the Dollar in afternoon trading to finish 0.4% higher against Greenback on Monday.

There were further signs of a moderate slowdown in the housing market in the UK as markets opened for trading for the week. Growth of asking prices for homes in England and Wales slowed to the lowest since last August according to online retail estate company Rightmove. The Rightmove House Price index climbed by 5.4% on an annualised basis, down on the 6.6% recorded in February. Price growth slowed to just 1% month on month. The Conference Board’s Leading Economic index, a measure of future trends in overall economic activity, remained close to static in January, climbing by just 0.2% after no change in December. In other news, with just 50 days left to go until the UK General Election, Leader of the Labour party Ed Miliband yesterday ruled out a coalition with the SNP.

No major data releases out in Britain today. Attention among traders will shift squarely to Wednesday morning where, not only will we see the release of the Bank of England minutes, but also average earnings and unemployment data from National Statistics.


The single currency regained some much needed ground yesterday, appreciating by 0.6% on the Dollar.

Monday was a very quiet day of trading in the Eurozone economy in terms of economic announcements, with no major data releases. However, the ECB did announce it spent €9.75 billion on bonds in the first week of its quantitative easing programme last week, while a German government spokesman reiterated the country’s desire to keep Greece in the Eurozone. President of the ECB Mario Draghi spoke about the future of the finance industry at a dinner in Frankfurt yesterday evening. Another low key appearance from Draghi, who stated an economic recovery was taking hold, thanks in part to the bank’s stimulus measures.

A confirmation of the inflation data for February within the Eurozone at 10am this morning will be followed by annualised employment change data and the monthly economic sentiment survey from ZEW for Germany and the wider Euro-area.


The Dollar declined against its peers by 0.4% on Monday after a string of disappointing data. The US Dollar index, however, continues to hover close to multi-year highs.

A number of data releases in the US surprised on the downside on Monday afternoon as news from the US continues its moderate softening. Industrial production, a measure of output of manufacturers, utilities and miners, rose less than forecast by 0.1% for the month of February. A surge in utility output was offset by weak factory production due to lower demand in the oil and gas sector. Moreover, capacity utilisation, a primary measure of slack in the US economy, dipped unexpectedly by 0.2% to its lowest reading since August at 78.9%. Disappointingly, the measure continues to fall short of the benchmark pre-recession level of 80%. Elsewhere, the National Association of Home Builder’s housing market index declined for a third straight month, to its lowest level since June, and now stands at 53. While again below expectations, it remains above the level of 50 which indicates a generally favourable outlook on home sales.

No more than second-tier data releases in the US today. Housing starts and building permits from the US Census Bureau at 12:30pm GMT will likely lead to moderate volatility. The market will, however, be dominated by build up to the crucial Federal Reserve minutes on Wednesday evening.

Rest of the world

Having stabilised of late, oil prices took a tumble on Monday with crude oil falling to its lowest price in six years. Unsurprisingly oil-dependent currencies such as the Norwegian Krone (NOK) and the Russian Ruble (RUB) finished lower for the day.


Written by Enrique Díaz-Álvarez

Chief Risk Officer at Ebury. Committed to mitigating FX risk through tailored strategies, detailed market insight, and FXFC forecasting for Bloomberg.