The Euro ended European trading little-changed against its major peers following the publication of mixed ZEW economic sentiment surveys.
The reports showed that while Germany’s view of the current situation improved, economic sentiment in the Eurozone’s largest economy declined.
Overnight the Australian Dollar wavered as a result of domestic data and Chinese concerns.
Australian reports showed that the nation’s Westpac leading index declined by 0.2 per cent in January, month-on-month, following an advance of 0.1 per cent in December.
The index signals what pace of economic activity can be expected at 3-9 months in the future.
Westpac economist Bill Evan’s stated; ‘The index is still indicating above trend growth in the three to nine month window through 2014. However that message has softened in the last few months from the recent above trend peak in October last year of 1.23 per cent.’
Evan’s also commented that Westpac is forecasting below trend growth of 2.6 per cent in Australia this year.
However, separate reports revealed that Australia’s conference board leading index advanced by 0.8 per cent in December, four times November’s gain and the fourth monthly increase. The nation’s wage cost index climbed by 0.7 per cent in the fourth quarter (more than the 0.6 per cent advance expected).
The ‘Aussie’ was then adversely affected by the news that China’s MNI business indicator for February eased from 52.2 to 50.2.
There are worries that tomorrow’s private report will show that China’s manufacturing sector contracted in February, with the HSBC/Markit gauge holding at 49.5 – just below the 50 mark separating growth from contraction.
As China is Australia’s main trading partner, this sign of a slowdown in the nation’s manufacturing sector would pile pressure on the latter country’s economic outlook.
If the PMI comes in below the 50 mark separating growth from contraction we forecast that the Euro will advance on the ‘Aussie’.
Declining Asian stocks also saw the Australian Dollar edge lower against the Yen for the first time in four days.
A lack of influential economic news for the Eurozone may limit movement in the EUR/AUD pairing in the hours ahead, although the region’s construction output report will be of interest.
Overnight China’s manufacturing data and Australia’s transactions figures could trigger ‘Aussie’ fluctuations.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.6546,