Euro Loses Momentum at the end of the Week with Softening Eurodollar Bids

• Euro struggles to gain momentum on Friday, pares back week’s performance.
• A slew of ECB talking points this week have bid down rate cut hopes.
• Next week’s economic calendar is light on eurozone data.

The Euro (EUR) is softening on Friday, backsliding against the majority of its major currency peers as dovish talking points from the European Central Bank (ECB) weigh on rate cut hopes. Next week sees limited eurozone data releases, with mid-tier Industrial Production and final Harmonized Index of Consumer Prices (HICP) due in the first half of the week.

A consensus miss on the US Producer Price Index (PPI) is the driving headlines on Friday as producer-level inflation recedes faster than expected. Slumping producer inflation kicked market expectations of Fed rate cuts into overdrive heading into the week’s final trading hours.

Daily digest market movers: Euro broadly weaker in Friday trading amidst dour outlook

• The Euro is down against most of the major currency bloc on Friday, declining 0.15% against the US Dollar (USD).
• ECB’s President Lagarde: Rates have probably reached peak, EU not in recession.
• Multiple ECB officials have hit the wires this week, easing back market hopes of rate cuts.
• The ECB’s Economic Bulletin begrudgingly admitted the eurozone was in a “technical recession” with a soft landing scenario all but guaranteed.
• US annual PPI inflation rises to 1% in December vs. 1.3% expected.
• MoM US PPI in December held at -0.1%, in-line with November’s -0.1% (revised downward from 0.0%), missing the market forecast of 0.1% growth.
• Annualized core PPI also missed the mark, declining to 1.8% from November’s YoY figure of 2.0% and coming in below the median market forecast of 1.9%.
• Easing PPI inflation sparked a pop in Federal Reserve (Fed) rate cut expectations.
• Markets once again see 160 basis points in Fed rate cuts through 2024, up from 154 bps.

Euro price this week

The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Australian Dollar.

 
USD
EUR
GBP
CAD
AUD
JPY
NZD
CHF

USD
 
-0.09%
-0.23%
0.35%
0.49%
0.11%
0.10%
0.20%

EUR
0.08%
 
-0.15%
0.44%
0.57%
0.19%
0.19%
0.25%

GBP
0.23%
0.14%
 
0.60%
0.72%
0.35%
0.34%
0.43%

CAD
-0.35%
-0.43%
-0.57%
 
0.14%
-0.23%
-0.25%
-0.18%

AUD
-0.49%
-0.57%
-0.72%
-0.14%
 
-0.37%
-0.39%
-0.31%

JPY
-0.12%
-0.18%
-0.34%
0.27%
0.40%
 
0.01%
0.09%

NZD
-0.09%
-0.20%
-0.33%
0.26%
0.39%
0.01%
 
0.10%

CHF
-0.19%
-0.25%
-0.40%
0.19%
0.33%
-0.06%
-0.06%
 

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen,

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