Not the best way to start the week, but eh, a win is a win, right? The euro scored a measly 8-pip win against the dollar yesterday when EUR/USD finished the New York session at 1.2954.
It fared better against the yen though. EUR/JPY closed the day 34 pips above its opening price at 101.92.
Positive data from the U.S. and China were released in the past couple of days. However, word around the street is, the euro wasn’t able to benefit much from the pick up in risk appetite because Spanish bond yields once again rose!
Borrowing costs on 10-year Spanish bond yields increased by 19 basis points to 5.77% yesterday. Although yields are far from the 7% threshold (considered to be the unsustainable level) the rise reflects investor concerns about a Spanish bailout.
But don’t worry, the euro doesn’t have to be at the mercy of market sentiment! According to our forex calendar, we have a few reports on tap from the euro zone today. Make sure you watch out for them as they would probably affect the shared currency’s price action.
The German ZEW Economic Sentiment report for October is anticipated to show an improvement with the forecast up at -14.6 from September’s -18.2 reading. Meanwhile,the EZ ZEW Economic Sentiment index is eyed at -1.1.
Inflation reports are also due today! The headline CPI reading is seen at 2.7% for September while the core figure has been estimated at 1.6%. Positive figures would probably send the euro higher. Remember that ECB President Draghi mentioned that inflation pressures have somehow increased in the region. And so, higher-than-expected readings could give the ECB one more reason not to slash rates.
All economic data are due at 9:00 am GMT. Don’t miss them!