Euro under pressure

The euro has been under pressure lately, not helped by some poor data out of the Euro Area, and has now fallen below $1.09 against the dollar, its weakest level since around mid-2017, and to below 84p against sterling, which is not too far shy of its most recent low of under 83p set immediately following the general election in the UK. The pound has advanced against the dollar and is almost a cent higher week to date trading close to $1.30

Reports that the number of coronavirus cases may be a good deal greater that previously believed, based on a new method of diagnosis, is likely to weigh on European equity markets this morning, while core bond yields have fallen in response with German 10-year yields back down to around -0.40%

Central banks are closely monitoring the economic fall-out from the coronavirus but think the impact will be temporary, with the ECB’s Philip Lane commenting that it could have a “serious short-tem effect”, particularly on China’s economy obviously, before activity bounces back subsequently, so that over the course of a year, say, the impact might be “relatively minor”

The industry sector of the Euro Area economy ended 2019 on a very weak note with output falling by 2.1% in December from November and by 4.1% from December 2018

The RICS housing survey in the UK reports a post-election ‘bounce’ in January, with increases in the number of agreed sales, the number of new homes being listed for sale, and in new buyer enquiries, while the balance of respondents expecting house prices to increase also rose last month

Data due today include CPI inflation and jobless claims in the US