The spectacular results from last week's PMI and German Ifo Business Climate report helped push the EUR higher against most of its currency pairs. However, the British Pound suffered heavy losses at the end of last week's trading due to worse-than-forecasted GDP results. Climbing back above the 1.42 level against the USD, and even spiking upwards of 0.8650 against the Pound Sterling, the EUR's gains were unmatched last week.
Precisely opposed to the value of the EUR, as pertaining to risk appetite, the Euro-Zone currency indeed strengthened due to the perception that its regional economy is stabilizing. This belief has helped stoke the notion that recovery is on the way by the end of this year. The subsequent return to riskier assets helps devalue safe-havens such as the Dollar, while pushing more diverse currencies, such as the EUR, higher against the other currencies.
No doubt the devaluation of the Pound also led to a boost in the value of the EUR by the sheer weight of regional competition. As the wave of risk appetite took hold last week, the GBP may not have offered investors the necessary level of security, which also helped boost the gains made by the EUR.
While economic releases from the Euro-Zone led the market last week, and also helped revive demand for the EUR, this week's trading will see no such thing. The EUR is surprisingly absent from this week's calendar as the US economy takes the wheel. If US data can encourage the recent return to risk appetite, then the EUR's rally may continue this week.