The euro is attempting to break down more barriers in currency markets this morning after comments from President Mario Draghi yesterday suggested that the European Central Bank could disclose its new crisis-fighting master plan during Thursday’s monetary policy meeting.
The single currency is now within striking distance of cementing two-month highs versus the US dollar with Draghi hinting that buying three-year government bonds could be the solution to bringing down borrowing costs across the euro area and for Spain in particular.
With confidence around Europe’s fight against the debt crisis keeping a lid on disappointment attached to global economic news recently, the safe haven US dollar is looking vulnerable ahead of today’s trading session. Cable is also threatening to reach four-month highs, helped by British manufacturing data yesterday which showed businesses were busier than expected in August.
Still, the pound could slip up following last night’s weak UK retail sales report which is likely to create some nervousness before today’s data on Britain’s unstable construction sector. The euro could also lead a downturn for currencies perceived to be risky if meetings between governments across Europe today fail to encourage the ECB’s struggle to restore confidence in the euro area.
US markets will re-open today after Monday’s holiday which will help trading turn over at a much higher pace. Investors will also have data on US manufacturing to consider this afternoon which may just create a little more anxiety across financial markets before Friday’s all-important US employment report.
