The euro ended the week on a high against the dollar and broke through the $1.14 mark several times throughout Friday. The moves came despite yet more disappointing data from the eurozone, as the Ifo business climate index for Germany dropped by 1.9 points to 99.1 in January and well below expectations of 100.6. It is the lowest reading since February 2016 and comes as global trade tensions and Brexit uncertainty continue to exert influence on sentiment.
It was not a great week for the eurozone, as the German manufacturing sector contracted for the first time since November 2014. The European Central Bank admitted that the risks surrounding eurozone growth have now moved to the downside and that further stimulus is required to support the economy.
Today ECB president Mario Draghi is being kept busy, with two speeches on the schedule. We do not expect him to say anything too different from what was said at last week’s press conference. On Wednesday, we will see the Gfk consumer confidence reading for February, as well as business and consumer confidence, and economic, services and industrial sentiment. It could be another tough week for the eurozone.