Eurozone exports to central and eastern Europe were a major driver of the “boom” times (2-3% growth is considered a boom in Europe) in the eurozone until the bubble popped earlier this year. A negative feedback loop could be developing where weaker demand in Eastern Europe drags the eurozone growth down with it and demand for products from central and Eastern Europe falls further.
Overnight, EUR/USD fell to within 10 pips of out medium-term target at 1.2710. Close enough. It trades now at 1.2810 while EUR/JPY consolidates below 125.00.