Euro at 10-week low as inflation data puts pressure on ECB to cut interest rates
City Index February 3, 2014 2:01 PM
<p>An action-packed start to the month, with important data releases. Today starts with PMI data from the EU and UK. Both are expected to be […]</p>
An action-packed start to the month, with important data releases. Today starts with PMI data from the EU and UK. Both are expected to be very close to the previous and could do with a lift after last week’s emerging markets sell off. The euro is at a a 10-week low after slightly weaker inflation data put pressure on the ECB to cut rates to counter deflation risks. In the US, the ISM PMI will be released this afternoon and a slight drop is expected.
There’s also the RBA rate announcement this week, expected to remain unchanged. But with the AUD being higher than what the RBA want they could use this as a tool to weaken the currency. ADP data in the US will be announced on Wednesday and has been posting better than expected results over the last two months.
On Thursday the UK and EU Central Banks will announce their rate decisions. The consensus is that no change is expected but the ECB have shocked the market before with a surprise rate cut after weaker than expected inflation data. We find ourselves in the same territory, with weaker inflation causing a risk of deflation.
Friday is when the non-farm payrolls for the US will be abband after last month’s very weak data due to the big freeze, it is expected to be back to normal. Lots of data to digest this week so expecting a lot of swings as each are announced and also any comments from central banks.
Supports 1.3460 1.3400 1.3380 | Resistance 1.3500 1.3560 1.3600
Supports 101.75 101.60 101.15 | Resistance 102.45 103.00 103.50
Supports 1.6390 1.6370 1.6315 | Resistance 1.6470 1.6530 1.6610
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.