ECB Expresses Concern Over Euro Strength
European Central Bank policymakers have expressed concern about a possible overshoot in the euro – after the meeting minutes were published. A stronger euro make’s Eurozone products more expensive and therefore less competitive.
The minutes showed concern about the recent euro bounce as they decided against any change to their pledge for continued monetary stimulus. ECB policy makers warn that easy financing conditions "could not be taken for granted". The euro fell on the release of the minutes to a three-week low against the USD.
Eurozone inflation came in line with expectations, remaining steady at 1.3pc in July. Accommodation services and package holidays had the biggest impact on inflation according to Eurostat. Telecommunication and fruit and vegetable prices pulled down the figure most.
UK retail sales come in flat but beat expectations with the July’s month/month figure rising by 0.3% according to the Office for National Statistics. June’s figures however were revised down from 0.6% to 0.3%. Most things are off the shopping list except for food – which is still filling up our trollies here in Britain and was up 1.5%.
Much of this movement is due to Sterling weakness but if we look at the chart we can cable has run straight into the rising trendline that has held since March. The bulls now have a chance to push the pair back to $1.30 and higher.
And staying with retail – shoppers are reeling their DIY spending with the owner of B&Q posting a loss of more than £50m. Kingfisher said sales at the home improvement chain were down 8pc in the second quarter and it is the worst performer on the FTSE 100 today.
--- Written by Katie Pilbeam, DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.