It seems that it will be extremely difficult now to stop the depreciation of the most traded currency pair following last week's ECB's press conference.
Germany has been one of the main locomotives of Europe's economy in the recent years and mostly, due to the resilience of German economy, the 18-nation's bloc emerged from the recession last year.
The Australian Dollar started this week in a narrow range, with the AUD/USD trading around 0.9360. During the last week, the pair already added 1%, and this week it has a potential to perform another impressive rally.
The Reserve Bank of New Zealand made two consecutive rate hikes in March and April, bringing the official cash rate to 3.0%.
For some time markets calmed down and lowered their expectations for a sooner-than-expected rate hike from the BoE.
The latest Janet Yellen's testimony confirmed earlier concerns the central bank cannot control everything. People give the Federal Reserve way too much credit. Earlier this year, the Fed pledged to start raising rates next year.
As it was widely expected, Mario Draghi's comments provided a long-term bearish bias for the single currency, as EUR/USD was changing hands around 1.3750 on Monday, after moving to 1.40-mark before the press conference.
Following a move towards 0.94-mark on Thursday, the Aussie moved lower against other major currencies on Friday, as comments from the RBA suggested the economy is not that strong as many expected.
The Reserve Bank of New Zealand made two consecutive rate hikes in March and April, bringing the official cash rate to 3.0%.
The manufacturing PMI disappointed markets last week. Due to volatile gas and oil production, manufacturing output for March was expected to fall short of analysts' expectations as well.
In January, Nouriel Roubini, the New York University economist, who is known for predicting the housing bust and global financial crisis, claimed the U.S. economy will disappoint this year.
German economy is losing momentum, this is not a question, as it is highly dependent on its exports and external demand. Manufacturing, services activity and factory orders all surprised markets to the downside in May.
Last week Mario Draghi proved once again that a lack of action and talking down the currency is an effective strategy.
Australia belongs to the list of countries with a triple A rating, and the currency has been resilient even despite concerns about slowing growth in the domestic economy, as well as largest trading partner– China.
Stronger exports? Resilient domestic and external demand? What is the main driver of the economic recovery?
Another calm and drowsy meeting from the Bank of England. Soon it will become a habit already, and investors will lose their interest in monthly meetings.
It seems that the U.S. officials are playing with investors, making it more and more complicated to say whether the economy is building up steam following severe winter, or the damage was more serious.
No surprises. Again… The European central bank left all three rates unchanged this month, completely in line with analysts' expectations.
This week the RBA will have a great opportunity to clarify its view of the economy, as it differed during the last several statements.
There are growing tensions between Bank of Japan members and central bank's governor Haruhiko Kuroda. The latest minutes from the BoJ's meeting during April 7-8 showed that members agreed that consumer spending still remains buoyant following April 1 tax hike, as labour market, and, wages in particular, are improving.
The U.K. is now one of the fastest developed economies in the world. The growth is mostly backed by a booming housing market and a decline in savings rate.
This week's main highlight is the ECB meeting, while all hopes for traders, who are trading the Dollar lied on Janet testimony, an event which could be the main catalyst for the Dollar.
After Wednesday's set of data from Germany, Mario Draghi will be under bigger pressure, as even Europe's powerhouse starts sending worrying signs.
With no surprises to market the Reserve Bank of Australia left its benchmark interest rate unrevised, as decelerating inflation and upcoming cuts in the government spending provide room for the RBA to support economic growth further.