The euro ended the week on a winning note, as it posted a 28-pip victory versus the dollar to finish at 1.2956, marking the third consecutive day it closed higher. Will the good times roll or will the euro bulls come in with a weekend hangover to start the week?
The shared currency got a slight boost from industrial production figures, which printed a month-on-month growth rate of 0.6% for August. Not only was this the complete opposite of the anticipated 0.4% decline, but it also matched July’s rate of 0.6%. Tres bien, monsieur euro!
Moreover, the bulls were able to overcome some disappointing data from the IMF, which downgraded their global growth forecasts for 2012 from 3.5% to 3.3%, and 3.9% to 3.6% for 2013. IMF economists pointed to growing concerns in Asia as the main reasons for the downgrade.
The action begins in the euro zone tomorrow, when the German ZEW economic sentiment and CPI reports are due at 9:00 am GMT. If the ZEW report comes in worse than the projected reading of -14.6 or if the CPI reports indicate that inflation remains subdued, it may give the ECB President Mario Draghi and the rest of the ECB policymakers enough reason to reconsider their “no more rate cut for 2012” stance.