US data positive all around – Euro Zone gloomy

Europe consumer confidence has fallen to its lowest levels since April. In the US positive results produced below expected unemployment numbers and jobless claims whilst existing home sales are on the up by beating expectations by .13M. This is fuelling downward pressures on the EURUSD which haven’t let up since Mario Draghi’s negative interest rate introduction and the ECB LTRO policy adjustment in May of this year. This is playing into the hands of European policy makers and the Draghi’s policies are paying off on the FX market so far. This should support European exporters and fuel growth. Consumers are simply not convinced yet that these policies are working and SME business does not seem be accessing cheap money offered via the ECB. The EURUSD has massive downward potential and is likely to see more pain on the EURGBP cross rate.

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