As the European session began the Euro strengthened against the majority of its most traded peers in response to surprisingly upbeat manufacturing data for the Eurozone and its largest economy.
The Pound to Euro Exchange Rate is currently trading in the region of 1.1837 as of 12:30 GMT
While the currency bloc’s services sector didn’t fare so well (producing a reading of 51.0 following November’s 51.2 level) the gauge of manufacturing advanced from 51.6 to 52.7 this month.
Similarly, Germany’s manufacturing PMI came in at 54.2 from 52.7 (the nation’s strongest output since 2011) while the services PMI produced a reading of 54.0 rather than the 55.3 forecast.
Markit economist Tim Moore issued the following remark with the German figures; ‘Germany’s private sector expanded for the eighth month running during December […] manufacturing achieved a particularly strong end to the year, with improving new order flows and renewed job creation also providing encouragement that the sector has gained momentum since the Autumn.’
Eurozone composite PMI climbed from 51.7 to 52.1 in December.
The GBP/EUR Exchange Rate hit a low of 1.1810
Following the release of the manufacturing figures, economist Marco Valli commented; ‘We expect Eurozone GDP momentum to strengthen as we enter 2014, reflecting a firming export impulse, more favourable corporate fundamentals and pent-up demand for capital goods. A slow improvement in the labour marker, a further easing of fiscal tightening and very low inflation will also help push average GDP growth toward 1.5 per cent over the course of next year.’
The Euro was also supported by encouraging domestic trade balance figures.
While a lack of influential UK news could limit EUR/GBP movement before tomorrow’s UK inflation data, the EUR/USD pairing is likely to fluctuate following the publication of US manufacturing/industrial production reports and the nation’s preliminary Markit PMI.
With a stream of important Eurozone data on the cards, the next few days could be bumpy for the Euro.
If the reports, including tomorrow’s ZEW economic sentiment surveys, show improvement and decrease the odds of the European Central Bank introducing a negative deposit rate the Euro could end the week on a high. Of course, the FOMC announcement will also be of considerable interest.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3783 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8448 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5477 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6719 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7256 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1837 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6495 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.5996 <
(Correct as of 12:30 GMT)
Key events for the week ahead
Tuesday: Eurozone/German ZEW economic sentiment surveys
Wednesday: German IFO business climate/current assessment/expectations reports
Thursday: Eurozone current account
Friday: German/Eurozone consumer confidence