Economic News

EUR - General Information

The Euro is the official currency of the European Union known as the Euro Zone. The Euro is used as accounting currency from 1999 and as physical banknotes and coins from 2002. Some of the European Union members such as the United Kingdom and Denmark has chosen not to adopt the Euro as their official currency. Here you can find a daily update of the EUR international currency trends

Official currency of European Union, euro is abbreviated as EUR. The thirteen states in European Union that use euro as their currency are Finland, Spain, Austria, Belgium, Germany, France, Ireland, Greece, Portugal, Luxemburg, Italy, Netherlands and Portugal. Outdoing the United States dollar, Euro has the maximum combined distribution of cash in the world. Before the launch of euro, European countries or Euro zone had European currency unit, ECU, as their financial currency which was completely replaced on the ratio of 1:1.

Euro is also supposed to become official currency of two more countries from year 2008 onwards, these are Malta and Cyprus. Other than the official users, euro also has three unofficial users Montenegro, Andorra, Kosovo, Vatican City, San Marino, reunion and Monaco. Denmark, UK and Sweden are some of those countries which are not using euro for their currency purpose.

Euro coins are found in the denomination of 1 cent, 2cent, 5cent, 10cent, 20cent, 50 cent and 1EUR, 2EUR. Divided in 100 cents, European coins have two sides, one showing the value of the coin and other showing the national image of the country in which it is going to be circulated. On 12th December 1996, the European commission assigned the EUR sign to euro. The sign also known as glyph is a combination of 'Greek epsilon'.

Came to existence in the year 1999, euro was at beginning a secretarial currency in the market and soon within three years it was introduced in form of coins and currency notes in 2002. The establishment of euro goes back to year 1992 and was a result of the 'Maastricht Treaty on European Union'. Robert Mundell, Robert Tollison, Tommaso Padosa-Schioppa are few of the contributors in the creation of euro as and international currency.

The control of ECB or European central bank on euro has its given it the power, as well as right to set any policy regarding the euro and its monitory issues. The ECB (European central bank) and ESCB (European system of central bank) is based in Frankfurt and has have the authority to manage and govern the printing, policies and circulation of euro notes and coins in the European countries or the Euro zone.

Today, Euro is being seen as a medium to reach political power, as it also has a major role in the foreign exchange market and is subjected to play a big part in any Forex currency pair. Although it is a result of reconstruction of monitory policies in Europe, the foundation of euro as the currency of European Union is based upon the objective of monitoring international a market by a single medium.

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Daily Economic News - May 06, 2008

The EUR appreciated vs. the USD yesterday as the single currency tested offers around the 1.5520 and was supported around a rate1.5425. The European currency ignored data released yesterday, that showed the Sentix Investor Confidence index unexpectedly weakened in May. This indicator measures investor confidence towards the Euro-zone economy. ECB President Trichet reported that growth, as well as the inflation in the Euro zone, remain significant. Local Consumer Prices rose by 3.3% in April, below the prior month's reading but still well above the ECB's target of about 2%. Now, while food and energy costs are on the rise, most traders believe that the ECB will keep its benchmark rate unchanged at 4.0% this week. The final Services PMI figures are due for release today and any revisions are likely to be negative. The central bank has a tough decision ahead of them and yesterday's record high Oil prices are not helping. Economic growth has taken a turn for the worse and if not for the strong inflationary pressures, the European Central Bank would have probably cut interest rates already. However inflation is rampant and because of that, it is not clear which way Trichet will sway on Thursday. Traders will be hanging onto his every word, looking for a hint of a possible breach in his hawkish stance. Also today we expect Swiss Consumer Prices. The price growth is expected to have accelerated in April. The EUR may further extend its gain versus the greenback on speculation the European Central Bank will hold its main refinancing rate at a six-year high this week to control inflation.

Daily Economic News - May 05, 2008

The EUR fell on Friday to a month and a half low against the USD. The Euro's fall came as positive indicators from the US flooded the news calendar. Traders were perplexed as rising speculations of high inflation in the Euro-zone, didn't stop the Euro's bearishness. Friday's German retail sales came well below expectation of 0.6% ultimately at a rate of -0.1%. In addition, Euro-zone Manufacturing PMI fell to 50.7 from March's reading of 50.8. Even though the European figures announced last week were not positive, the main reason for the EUR bearish trend of late was a strong dollar and the forecasted recovery for the US economy. Later on today ECB president Trichet is expected to speak. In his speech we expect president Trichet to supply additional indicators on the economic and interest rate policy direction in the short term. As well; it is extremely important for the EUR investors to follow Thursday's ECB conference. The questions and answers session is expected to give traders clear and strong figures for the short and the long term.

Daily Economic News - Apr 10, 2008

The EUR made gains against its major currency rivals yesterday, mainly due to positive economic news from the Euro-zone as well as US economic worries. Investors have taken to the fact that during the last week or so, Euro-zone figures have for the most part been positive and it has reflected in bullish behavior for the EUR. Yesterday, the German trade balance came back well above expectations showing higher than expected levels of exports sold by Germany to the world. The report reading came back at 16.9B, only a minute fall from last month's figure of 17.1B.. Also, the GDP report for the last quarter was released yesterday as forecasted, staying put at 0.4% growth. Today, the ECB is expected to announce that the 15-nation currency's interest rate will remain unchanged at 4%. ECB President Trichet is expected to speak today as well, as he will likely keep to his hawkish monetary stance, despite inflationary worries due to the jump in Euro-zone CPI in March, which hit an all time record. Expect volatility during the European session as today's events are critical to short and long term trends.

Daily Economic News - Apr 09, 2008

The EUR spent most of Monday range trading due to the absence of any Euro-Zone related events on the economic calendar. It has become evident that the EUR is notching a dominant line in the battle for the world's most appealing currency. As we are less than one day away from EUR and GBP Interest Rate announcements it is clear to see the difference between the two currencies, and coupled in with the USD, the issue is only magnified. The British currently find themselves in a position similar to that of America, as a slow-down in growth is currently pushing investors further and further away from GBP and USD and closer to the EUR. As we await the commencement of the G-7 conferences, Expect the EUR, amidst reoccurring hawkish monetary policy from the E-Z to make slow strides against its most oft traded pairs. On tap from the Euro-Zone today, we await the release of two mildly relevant events. Euro-Zone quarterly GDP and German Trade Balance figures will likely contribute little to EUR movement in the currency market. It is likely that the EUR will respond to outside news events in a positive manner throughout the day, and will see small rises if any in its value.

Daily Economic News - Apr 08, 2008

Traders supported the 15-nations currency on possible grounds that the ECB is widely expected to leave its key interest rate on hold without any reduction at 4 %. If the ECB does not reduce the key interest rate as widely forecasted, it will be an additional indicator for the wealth of the EUR-zone economy compared to the US, insuring again that the Euro-zone economy was not that badly affected by the financial crisis in the US markets. However, it seems that the UK economy was badly affected by the US's financial crisis. The Bank of England, which also meets on Thursday, is expected to cut the country's key interest rate by 25 basis points to 5%, trying to avoid a local rescission and to stop the effect of the financial crisis over the Atlantic. There is no expected important economic Data release in the Euro-zone today. Traders should follow the US's Pending Home Sales report release at 14:00 GMT and the FOMC Meeting Minutes at 18:00 to adopt a wide direction of the EUR/USD today.

Daily Economic News - Apr 07, 2008

The EUR declined last week against most of the major currencies on speculation that European economic growth will continue to slow. The single currency dropped 0.4% to the 1.5737 level vs. the USD, from 1.5796 a week earlier. In the past week, something went wrong with the EUR. Consumer Confidence within the Euro zone has fallen; Consumer Spending is contracting while German factory orders dropped 0.5%. The ECB is scheduled to meet on Thursday to discuss monetary policy and even though they are not expected to lower Interest Rates, there is a chance that Trichet will officially acknowledge the recent slowdown in growth. If that will happen, the EUR/USD will continue to lose height due to a tumbling sentiment. Given the recent turn in the European fundamental data, the next move by the ECB is a rate cut and the fate of the Euro will be determined by how quickly that happens. Looking ahead to today, we expect the Euro-zone GDP figures. However the figure is not likely to impact the EUR, which may slip slightly vs. the greenback today as traders exercise caution ahead of tomorrow's U.S. Pending Home Sales report.

Daily Economic News - Apr 01, 2008

Yesterday was a volatile session with the EUR swinging between gains and losses. The EUR rose as high as $1.5895 before retreating to around $1.5802 midway through the New York session. The EUR came close to a record high against the USD yesterday as higher than forecasted European price data reinforced expectations that the inflation-focused European Central Bank is not expected to start cutting rates soon. The CPI release from the Euro zone came at a 3.5% reading, compared with a year-on-year rise of 3.3% in February, marking a new record of the Euro-zone inflation since the launch of the Euro. While the Euro-zone data points to some slowdown of growth, elevated prices remain the ECB's main concern. The high inflation rate in the Euro zone is adding worries to the European Central Bank about price pressures in Europe and feed the expectations of near term interest cut by the ECB to control the prices and to achieve the annual target of a 2% inflation rate. With the highest inflation rate release, analysts expect the EUR/USD to break higher from the narrow consolidation range developed in recent days, with potential to peak the 1.60 rate over the next week. Moreover, the German Unemployment Rate released today is expected to show an improvement on the working force of the biggest exporter in Europe. Forex traders should follow the U.S. ISM reading to have more information of the EUR behavior today.

Daily Economic News - Jan 31, 2008

There was no significant Eurozone news yesterday as all attention shifted to the U.S interest rate announcement. The EUR rallied sharply against the greenback on the back of the Fed rate cut and it reached above the 1.4900 level. The EUR also rallied strongly against the GBP, as the BOE still struggles to balance rising inflation and slowing growth. However, the European currency had a mixed trading day against most of the other majors. Looking ahead to today, there will a host of Eurozone news which will be released kicking off with the German Retail Sales and Unemployment Rate. The German economy, which is heavily reliant on exports, remains resilient despite the recent appreciation of the EUR. The other key news today will be the Eurozone CPI, which will give some indication as to the inflationary pressures that the ECB may have to face. Many analysts believe that the strong EUR will eventually take its toll on the European economy and that it may take more hawkish comments from the ECB with regards to inflation in order for the EUR to keep its bullish momentum. The near term outlook for the EUR, in stark contrast to the greenback, remains bright and most analysts believe that it will once again head towards the 1.5000 level against the USD. However it may slip slightly this week before resuming its upward momentum as the market digests yesterday's rate cut causing some temporary greenback consolidation.

Daily Economic News - Jan 30, 2008

The EUR saw a slowdown toward the top of its week long rise against a basket of currencies, ahead of today's Fed rate cut. As investors turned their attention across the Atlantic, a small set of Eurozone data was released in line with expectations, but saw unexpected responses from investors in the market. Eurozone current account info came back with negative results, which should have resulted in bearish Euro behavior. Instead, the EUR stayed relatively unchanged against the dollar, due in large part to the tight monetary policies issued by the ECB. ECB President Jean Claude Trichets' speech from last week once again reiterated the hawkish stance from the ECB, as no interest rate cut should be expected in the near future. This should keep the EUR in line for steady progress in the future against a basket of currencies including the greenback. Today there are no events on the European calendar, as all eyes will be focused on news from the US. We should expect a slight strengthening of the 13 nation currency today, unless news from the US comes back better than expected.

Daily Economic News - Jan 29, 2008

The Federal Reserve's emergency rate cut helped propel the EUR/USD up towards the level of 1.4900. However, with Fed Futures pricing in another round of rate cuts on Wednesday and the ECB maintaining a hawkish tone, it may only be a matter of time before the pair takes its rally towards the psychologically important 1.50 level. Meanwhile, yesterday's European M3 Money Supply contracted for the first time in 4 months suggesting that the slowdown in lending and business activity is spreading across the Atlantic. The M3 indicator, which measures the value of all currency and liquid cash assets held by the public, printed at 11.5% which was considerably lower than the 12.3% forecast. The news took traders by surprise and EUR/USD immediately plummeted 30 points before stabilizing and recovering back to the 1.4700 level. In the following days, there are only a bits pieces of potentially market moving European economic data, namely Euro zone retail PMI, German unemployment, German Retail sales and manufacturing PMI. The lack of big events on the European calendar suggests that the movements of the EUR will be largely driven by the U.S. economic data.

Daily Economic News - Jan 24, 2008

There are many opinions as to what the ECB can do in order to help the situation in the US to cause a bigger global turmoil that could eventually lead to a world crisis. A very vivid example was given a few days ago where most of the world markets fell in an average of 5-6%. The ECB's part in all this is very important, as a rate cut on their side might ease the pressure from the US, and cause the EUR/USD to return to normal level. It could be interesting to see how fast the ECB will comply with the need to cut the rates. However, Trichet said yesterday that a rate cut was not to be expected, which will keep the EUR afloat for now. But as rates remain at 4% in Europe as rates drop in the US, the stock market crashes may cause a reversal of fortune for the EUR by way of a correction in the coming week. As for today, the European calendar contains several interesting events such as the German Ifo Business Climate Index at 9:00 GMT which is expected to drop a bit from 103.00 to 102.3. slightly later at 9:30 GMT we should be expecting new from the UK housing sector in the form of the British Bankers' Association (BBA) Mortgage Approvals which measures the number of home loans issued by the BBA during the previous month, and might have some impact on the ongoing weakening GBP. European Central Bank (ECB) President Jean-Claude Trichet will also speak at the World Economic Forum, in Switzerland shortly after US Treasury Secretary Paulson, and strong price movement is expected in that time frame, especially in the EUR/USD. It looks like the EUR will continue its path of strengthening today, as it will probably do until the end of this month when the feds will indeed make a very important decision whether the US rate will be cut again or not.

Daily Economic News - Jan 21, 2008

Last week, the EUR declined to a three-week low versus the dollar on speculation that the economy of the 15-nation region will slow, leading the European Central Bank to a possible rate cut in the future. The EUR weakened against 15 of the 16 most- active currencies and at the same time it has decreased to a four-month low against the Japanese yen. ECB council member Yves Mersch said on Jan. 16 that policy makers should use caution as risks to economic growth increase. A day later, Mersch said officials didn't discuss the option of an interest-rate cut at their meeting last month, when the central bank kept the rate at 4%.

Today's European calendar will be relatively empty aside from the Swiss PPI which is due at 8:15 GMT and has a forecast of 0.2% and a previous figure of 0.3. It looks as if the EUR will continue the weakening move up to a certain point, and will then regain the positive momentum back to the level where the expected US rate cut will be relatively encapsulated in market prices.

Daily Economic News - Jan 16, 2008

Yesterday the main news released from the European economy was the German and Eurozone ZEW Economic Sentiment. These figures, which measure institutional investor sentiment, released at -41.6 and -41.7 respectively. This was below the forecasted figures of -40.0 and -37.8, which is an indication that at least 80% of market participants surveyed are pessimistic, in contrast to 40% that are optimistic, with regards to the European economic outlook. This negative sentiment can mainly be attributed to the fact that the strong EUR is beginning to dampen exports and therefore slowdown productivity and growth. Also the ECB is struggling at the moment to balance out growth and inflation, as the ECB has reiterated many times in its MPC meeting that inflation risks remain on the upside. Therefore on the back of this soft data the EUR depreciated sharply yesterday against most of the majors. Although it did initially bounce up beyond the 1.4900 level against the greenback on the back of weak U.S Retail Sales figures, it eventually got pulled down again as the negative sentiment surrounding the German and Eurozone economy prompted investors to sell the usually resilient EUR.

Looking ahead, the only news to be released from the Eurozone today will be the German and European CPI figures. Both these figures are expected to remain unchanged and should not have any noticeable impact on today's EUR movement, which will be more depended on some key U.S data releases. Also ECB President Trichet will give a speech later today and it will be closely followed by investors for hints on future ECB monetary policy. For the moment the main question on analysts' minds is how high the ECB will permit the EUR to rise before we see a direct policy intervention. It seems that negative U.S data could push the EUR beyond the 1.5000 level against the greenback but it is unlikely that the ECB will permit it to rise any further before intervening.

Daily Economic News - Jan 15, 2008

The strength of the EUR has become a point of regularity, as the 15-nation currency continues to perform well against all of its major counterparts. As the EUR/USD slowly closes in on the 1.50 level, speculation is rising as to the behavior of the ECB after such levels are achieved. Investors must question whether or not President Jean-Claude Trichet's hawkish stance toward monetary policy in the EU could continue if the Euro keeps rising toward "inflationary" levels against its counterparts. A considerable rise in the Euro could directly contribute to the slowing of Euro-zone growth, especially in industries in direct competition with the US and Asia.

As we enter the second day of what has been the busiest economic event week in 2008, we are due to hear back about two low-volatility news events today. Today at 10:00 GMT will see the release of ZEW Economic figures from Germany and the whole of Europe. Figures are expected to be positive and could help push any negative US data toward the 1.50 break point for EUR/USD.

The EUR will likely take a backseat to investor's focus on the dollar today; however it will be intriguing to see if the ECB hint to any change in their current monetary policy if the Euro-zone currency continues to strengthen.