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The single currency is back on the defensive. After it made a compelling comeback on the latter half of February, the pair is in for another bearish turn as the single currency receives pressure from the results coming from the bloc’s economy. The EURNOK pair is expected to reach its support by the end of the month or perhaps by the first few days of February. The Norwegian krone remains firm against the euro after a string of good results coming from the country’s economy. Earlier this week, Norway’s core consumer price index for January rose from 1.8% prior to 2.9%, exceedingly well beyond forecasts of 2.0%. Norway’s core inflation for January also unexpectedly made a notable rebound from -0.2% to 0.4%, topping projections of -0.6%. Bulls, however, are praying that the upcoming reports from the eurozone produce strong enough figures to prevent the pair from further declining in the foreign exchange market.
Despite the dull figures coming from the Swedish economy, the EURSEK pair is widely expected to crumble to its support levels by late February as the single currency continues to weaken. The disappointing projections that are coming from the bloc’s economies aren’t helping the euro to defend its gains against the Swedish krona. Later today, the bloc’s monthly and annual industrial production reports are scheduled to be released and both reports are expected to further contract to negative regions, pressuring the single currency along with it. Then, for tomorrow, a series of reports from Germany are expected to show stagnant figures from its performance in the first month of the new decade. To make matters even worse, the increasing concerns of investors on the impact of the novel coronavirus to is straining the strength of the bloc’s single currency. Still, bulls are expecting support once the European Commission announces its growth forecasts.
The alarming jump of the Czech Republic’s unemployment rate barely prevented bears from running away with gains in sessions as the recent interest rate hike recharged the Czech koruna’s battery. The pair has been gradually declining since the latter quarter of 2019, and 2020 is no different for investors. The Czech koruna is widely believed to continue strengthening, thus pulling the eurozone’s single currency down. It is projected that the pair will hit its support levels before the month ends. Just recently, the Czech Statistical Office reported a surge in the country’s unemployment rate, hiking from just 2.9% prior to 3.1%. However, the results were already expected by experts and investors which help prevented the Czech koruna from slipping against the single currency. Last week, the Czech National Bank unexpectedly raised the official monetary policy from 2.00% prior to 2.25%, reinforcing the koruna with it.
The dull figures that back both the euro and the Danish krone are making it difficult for the pair to actually make wild moves in sessions. The pair is struggling to break through the horizontal trend and is expected to hit its resistance by the end of the month. Denmark recently recorded weak results from its consumer price index for January as the official report showed that it contracted from 0.8% to 0.7% on a year-over-year basis. Meanwhile, the euro stands even weaker than the Danish krone thanks to the alarming drop in Italy’s industrial production reports from December and the deteriorating investor confidence from the bloc. Earlier this week, the Italian industrial production was reported to have dropped from 0.1% to -2.7% in December. And the Sentix investor confidence for February fell from 7.6% to 5.2%. The coronavirus is heavily weighing on investors’ confidence as China struggles to contain it and the death toll continues to rise.