The Euro is trading softer against Sterling after the UK’s service sector expanded at its fastest rate since December 2006 in July, against the US Dollar the single currency has begun to recover losses after data showed that the Eurozone economy improved in most sectors last month.
According to the London based Markit Economics, the latest services purchasing managers index rose to 49.8 in July, up from the 48.3 recorded in June. A reading below 50 marks contraction. Despite the sector continuing to contract, the rate of the decline has slowed markedly and looks set to finally reverse the trend of shrinkage next month.
Other data meanwhile showed that Eurozone business expanded for the first time in 18-months in July, adding to signs that the Eurozone economy is slowly starting to stabilize. Markit’s Composite Purchasing Managers Index increased to 50.5 in July, up from the 48.7 recorded in June. It’s the first time the figure has breached 50 since January 2012.
Adding to the sense of optimism was the release of the latest Sentix Investor confidence which showed that investor confidence in the region improved to its highest level in six-months. The Index of investor confidence improved to minus 4.9 in August, far above the minus 12.6 recorded in July.
Euro zone consumer morale hit its highest level in almost two years in July, just as economic sentiment hit a 15-month high.
Some economists are suggesting that the data shows that the Eurozone is starting to exit from its record long recession.
“Granted, the Euro area has experienced false dawns before, but the improvements in confidence and other forward looking indicators warrant at least some optimism for the outlook this time around. The real sparks which will hopefully ignite the recovery are the increasing signs of stabilization in domestic markets. This not only aided manufacturers, but also pulled the service sector right back to the cusp of recovery” said Rob Dobson, senior economist at Markit.
Euro (EUR) Exchange Rates
As of 11:00 am
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3281 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8640
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.7072 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3792 >