Week in FX Europe- ECB EU Growth Forecast Cut Drags Euro

ECB Chairman Mario Draghi’s statement after the European rate announcement deflated the euro after the EU growth forecast was reduced. The benchmark interest rate was held at 0.75 percent, but growth forecasts were slashed for this year and the next. The possibility of a rate cut next year is started to be priced in by the market. The ECB statement resulted in a further drop for the euro which had the worst one day loss in a month. Better than expected US employment data added to the single currency pain as the USD got a boost from a lower unemployment rate.

This week finance ministers from the EU met to reach an agreement regarding a eurozone banking union with the ECB at the head. France and Germany were at opposing sides of the argument where no side was able to persuade the other and talks will continue. Funny enough French FinMin Pierre Moscovici and German FinMin Wolfgang Schaeuble are both in the running to replace outgoing president of the EU Jean-Claude Juncker at the end of the year.

• UK Construction Shrinks Markit Survey Shows
• Reaction: ECB Hold Rates at 0.75%, Draghi’s Speech and Charts
• ECB Keeps Rates at Record Low Yield
• France and Germany Clash on Eurogroup Banking Supervision
• Bank of England Preempts Bank Bonuses with Warning
• ECB Comments Lead to Biggest one-day Loss in a Month
• S&P Downgrades Greece LT rating to “Selective Default”
• UK Government Reduces Growth Forecast
• Jean-Claude Juncker to Step Down End of December
• Spain Unemployed Rise by 1.5 percent
• EUR / USD – Pushed Away Strongly from 1.31

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