EUR

The only notable news yesterday came from the Eurozone,
providing the euro a bit of support following concerns last week that falling inflation
could put pressure on the European Central Bank to increase stimulus to boost
the economy.

German producer price index (a measure of commodity
inflation) increased by 0.1% in December and industrial orders in Italy
increased by 2.3% in November following a decline of 2.3% in October.

EUR

The only notable news yesterday came from the Eurozone,
providing the euro a bit of support following concerns last week that falling inflation
could put pressure on the European Central Bank to increase stimulus to boost
the economy.

German producer price index (a measure of commodity
inflation) increased by 0.1% in December and industrial orders in Italy
increased by 2.3% in November following a decline of 2.3% in October.

NZD

The annual rate of Inflation in New Zealand rose more than
expected in the fourth quarter, from 1.4% to 1.6%. A stronger rate of inflation
would put pressure on the Reserve Bank of New Zealand to start raising interest
rates with many analysts expecting a hike to occur in March.

Today

Today looks set to be as quiet as yesterday with the only
notable data on the calendar coming from the Eurozone and Germany in the form
of ZEW Survey of economic sentiment. Both sets of data are set to increase to
70.2 and 63.7 respectively.

This should give the euro further support but it’s worth
noting that last weeks fall in inflation will continue to put pressure on the ECB
to increase stimulus in the form of reducing interest rates; which may well
hinder any big gains for the euro.

Key Announcements:

10.00am – EUR – Eurozone ZEW Survey – Economic Sentiment
(Jan): Expected to increase to 70.2.

10.00am – EUR – German ZEW Survey – Economic Sentiment (Jan):
Expected to increase to 63.7.