The Euro ended the local session on a high yesterday as separate reports showed that Spain emerged from a two-year recession while consumer confidence in the Eurozone increased.
In response to the positive news the common currency advanced on the majority of its most traded peers, posting notable gains against the Pound and US Dollar.
Developments weren’t so encouraging in the US however, with both domestic mortgage application data and the nation’s house price index failing to reach the levels expected. As the harm caused to the world’s largest economy by the federal shutdown becomes more apparent, the odds of the Federal Reserve tapering stimulus are falling, and the ‘Greenback’ is dropping with them.
The Euro is currently trading against the US Dollar in the region of: 0.8524
The expectation that today’s US initial jobless claims report will show an increase in applications for unemployment benefit also helped the Euro maintain its bullish relationship with the US Dollar.
However, during the European session a mixed bag of data for the currency bloc inspired Euro fluctuations.
While the Spanish unemployment rate came in slightly below forecasts and expansion in Germany’s manufacturing sector exceeded estimates, services PMI for both Germany and France disappointed predictions.
Manufacturing PMI for France also showed contraction, coming in at 49.4 rather than the 50.1 expected.
Composite PMI for Germany, the Eurozone’s largest economy, came in at 52.6 in October – down from 53.2 the previous month and a three-month low.
Markit economist Tim Moore stated; ‘A slower rate of expansion in services activity meant that overall growth eased slightly from the trend recorded over the third quarter. However, the stronger manufacturing outturn during October is a signal that Germany’s resilient economic performance has continued this Autumn, while sustained gains in new orders suggest that private sector companies will remain on a growth footing in the months ahead’.
A little later Eurozone composite PMI came in at a two-month low of 51.5 instead of the 52.2 expected while services PMI for the currency bloc also slipped to a two-month low, falling to 50.9.
Manufacturing PMI for the Eurozone on the other hand came in at a two-month high of 51.3.
Economist Chris Williamson said this of the report; ‘The dip in the PMI in October is clearly disappointing, but it would be unwise to read too much into one month’s data. It’s too early to say that the recovery is losing momentum.’
However, while the Euro may fluctuate in the hours ahead, if US initial jobless claims increase as expected the Euro could extend gains against the ‘Buck’ during the North American session.
The Euro is currently trading strongly against the Pound but the EUR/GBP pairing could experience volatility after Bank of England Governor Mark Carney delivers his speech in London.
Euro (EUR) Exchange Rates
As of 09:00
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3803 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8526 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4297 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6403 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4322 <