Tim Riddell, Research Analyst at Westpac, explains that continued strength of both business and consumer surveys and firm hard data are continuing to swing sentiment towards a better performing Eurozone area and EUR.

Key Quotes

“It is increasing market debate and expectations for a guidance change in June, despite ECB’s Praet and Draghi suggesting that any change will be cautious and gradual. Such a response could now see EUR disappointment.”

“Political risks are likely to be limited until the French Assembly elections (1st ballot on 11th June) and the commencement of genuine negotiations later in June.”

“In the interim, EUR is likely to remain supported by improving sentiment with attention on the release of core inflation and employment data. EUR should be well supported above 1.10 with potential attraction in the form of previous highs between 1.1360-1.1460.”