The euro has weakened against the pound and has fallen to yearly lows against the dollar following the latest economic bulletin by the European Central Bank.
The ECB accepted that eurozone inflation appears to be lasting longer than expected but maintains the view that it is transitory and is likely to decline next year. The Bank noted rising energy prices, demand outpacing supply as economies reopen, and the end of the VAT cut in Germany as the causes of this rising inflation.
Next week is a relatively quiet week for eurozone data, with balance of trade and inflation figures being the standout. The euro is likely to continue to take its direction from sterling and dollar movements.
