The Euro strengthened against the US Dollar on Wednesday as positive Eurozone data offered support and as poor US home sales and weaker than forecast manufacturing data weighed upon the ‘Greenback’.
The single currency made gains after Eurozone manufacturing, services and composite purchasing manager’s index data all came in above economist expectations. Also adding support to the Euro was Portugal’s successful return to the bond markets and news that Greece has finally achieved a primary budget surplus.
The US Dollar meanwhile was weakened after the Washington based US Commerce Department released data which showed that sales of new houses in the USA unexpectedly plummeted in March to an eight-month low. The weak figure suggests that the nation’s housing market is facing bigger problems that just the bad weather seen in the winter.
Sales tumbled by 14.5%, the weakest figure recorded since July and one that was lower than the worst forecasts made by economists.
“Adverse weather conditions have had a negative impact on housing activity over the winter months and today’s March figures failed to benefit from an upward technical correction,” said Annalisa Piazza from Newedge Strategy.
Also disappointing the markets was the news that growth in the USA’s factory sector slowed in April according to Markit’s monthly PMI survey.
Manufacturing in the world’s largest economy dropped to 54.4 in April, down from the 55.5 figure recorded in March. Analysts had been expecting a rise to 56.0. A figure above 50 indicates expansion.
The Euro could experience volatility on Thursday if the latest IFO Business climate report out of Germany disappoints the market. Tomorrow also sees the release of business confidence data out of the Netherlands and France as well as Producer price inflation and unemployment data out of Finland.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3837 ,
Euro,,British Pound,0.8239 ,
Euro,,Australian Dollar,1.4913 ,
Euro,,New Zealand Dollar,1.6130 ,
Euro,,Canadian Dollar,1.5268 ,