The European Central Bank held interest rates and its quantitive easing on hold as expected on Thursday, July 21. The euro was weaker against major pairs after there was not clear signal on what the next step for the central bank is despite the anticipated negative effect of the Brexit vote on European growth by forecasters. Earlier in the week the German ZEW was a portent of things to come with a -6.8 confidence in the German economy for the next 6 months. For the full Eurozone the index was -14.7.
Forecast-beating earnings in the tech sector lifted European shares today and the dollar strengthened on growing expectations the U.S. Federal Reserve may raise interest rates before the end of the year.
This morning’s data from Europe has been mixed: UK’s inflation figures were surprisingly strong, while a key German economic sentiment survey came in significantly weaker and Eurozone’s construction output shrunk more than expected.
With stocks, pound and the yen dominating the headlines in recent weeks, traders haven’t paid as much attention to what still is the world’s most heavily-traded forex pair: the euro/U.S. dollar (EUR/USD) currency pair.