The euro has to look to the ECB for comfort next week

With EUR/USD set for its biggest weekly drop since April 2020 and EUR/CHF set for its own biggest weekly drop since January 2015, the euro is in trouble and the charts tell the story as well.

There isn't much reprieve on the cards for now and the ECB will be put to the stand to communicate something firm at next week's policy meeting surely. With inflation running rampant in the euro area and the Russia-Ukraine war causing energy prices to surge, it is easy to see higher price pressures in the region lasting for longer.

As such, a weaker currency isn't going to of much comfort for the ECB in their fight against inflation - even if the impact is perhaps rather minimal in this day and age. There was a time when ECB policymakers would have liked for a weak euro but this is quite the opposite. And that is something you perhaps wouldn't thought of saying even just a year ago.

There are but few options for the ECB to meddle with and the easiest would be to jawbone the currency and also send a firmer communique in terms of policy setting to counteract inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term. It may be tough considering not all policymakers may be on board but that is what is arguably needed now.

The other alternative is for a direct intervention to support the currency, something that hasn't taken place since 2000. And I don't see that as being viable or happening any time soon honestly.