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Euro's performance remains subdued - BTMU

FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, underlines the weak tone surrounding the single currency.

Key Quotes

"rising geopolitical tensions reinforcing euro weakness The gradual weakening of the euro is being reinforced by rising geopolitical tensions linked to developments in the Ukraine. Tighter links to Russia and the still weak and fragile nature of the economic recovery in the euro-zone leave the euro sensitive to developments in the Ukraine."

"The ZEW survey revealed yesterday that confidence in German economy weakened sharply in August. The expectations component has contracted in every month so far in 2014 and has now fallen below its long-term average signalling a weaker growth outlook in the 2H 2014. The release tomorrow of the euro-zone GDP reports for Q2 may garner more market attention given that the outlook for growth is also deteriorating."

"Further evidence of building disinflationary pressures in the euro-zone was also evident yesterday. It was reported that the annual rate of headline inflation in Portugal contracted by a larger than expected -0.7% in July reaching a new cyclical low. The combination of disappointingly low inflation and weak economic growth will keep pressure on the ECB to implement further monetary easing."

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