Industrial Production Data bodes well for the Euro
The majority of Eurozone data has been positive of late and the trend continued with yesterday’s Industrial Production data. There was a significant increase which bodes well for the Euro. This usually would have a bigger impact on GBP/EUR, but Brexit negotiations are currently the key driver for the pair.
If these positive data release continue this could influence the European Central Bank (ECB) to change monetary policy. Things are looking healthy for the Euro as we are about to enter 2018.
It is still worth keeping an eye on potential problems for the Euro. Catalonian independence does have potential to cause the Euro to slide if a separation from main land Spain does become more apparent. Greek debt although now slightly more manageable is not something that should be swept under the carpet. Although, I think a break away from the EU and a debt write off is unlikely. After all the International Monetary Funds (IMF) want their money back.
Eurozone Services PMI and ECB Interest Rate Decision due today
Eurozone Services Purchase Manager Index (PMI) is due out this morning. This gives an idea of the health of the services sector in this region and makes up a substantial amount of Eurozone GDP. There is expected to be a small contraction, but I am going to go against the grain due to recent positive data and predict there could be a small gain which could prove beneficial for the Euro.
The European Central Bank (ECB) interest rate decision takes place later today. I do not expect any change, but keep an eye on the monetary policy statement and press conference following the decision as if there is a hint to change in monetary policy this could influence the markets.
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