Back to Business as Usual for Euro

Dust off your data calendars everyone, because boring is back — for the currency markets at least.

Remember those carefree days when economic data mattered for currencies? When inflation figures pushed the markets around? When analysts compared one country’s growth outlook to another, and worked out which currency to buy and which to sell as a result? They were fine days. They were the days before large cracks formed in the European single currency project; before people started trying to figure out not which currency would perform the strongest, but which is likely to exist the longest.

So, unless a European bank goes belly up or some other stink bomb explodes in the region’s debt markets, the old-fashioned relationship between data and currencies looks set to persist. Few analysts are giving up on their disdain for the euro altogether just yet. Further gains in the euro above the psychologically significant $1.30 point against the dollar will be tough. But fresh lows for the year in the currency will likely take a fair while to build in this environment.

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