Although the prospect of positive manufacturing/services PMI for the Eurozone and Germany supported the Euro yesterday, the common currency did tumble against the US Dollar during North American trading.
The US consumer price index might have unexpectedly declined by 0.1 per cent in October but US advance retail sales showed an increase of 0.4 per cent, significantly better than the 0.1 per cent gain forecast.
This development, coupled with relatively hawkish minutes from the latest Federal Open Market Committee meeting, saw the ‘Greenback’ post widespread gains.
In the FOMC minutes it was stated that upcoming US ‘data would prove consistent with the committee’s outlook for ongoing improvement in labour market conditions and would thus warrant trimming the pace of purchases in coming months.’
The Euro is currently trading against the US Dollar in the region of 1.3409
The US Dollar consequently enjoyed a bullish relationship with the Euro overnight.
However, the Euro may well recover losses as the European session progresses.
While French manufacturing and services PMI came in below forecast levels (with the French services sector contracting rather than expanding as hoped) PMI reports for the Eurozone’s largest economy trumped expectations.
German manufacturing PMI came in at 52.5 rather than the 52.0 predicted (an almost two and a half year high) while services PMI leapt from 52.9 in October to 54.5 in November.
An economist with Markit said this of the result; ‘November’s survey suggests that the German economy has built up a head of steam through the final quarter of 2013 and is well on track to achieve growth of close to 0.5% for the calendar year. There are also signs that solid growth momentum should be sustained over the months ahead, as new business received by private sector firms increased at the steepest pace for almost two-and-a-half years.’
But as Eurozone PMI reports indicated that growth in the 17-nation currency bloc slowed for a second month in November additional Euro movement is likely.
Euro (EUR) Exchange Rates
As of 08:55 GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3409 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8333 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4445 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6276 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4032 <