A surprising run of data releases for the Eurozone left the common currency broadly weaker by the close of European trading, and the Euro largely retained declines overnight.
While disappointing German retail sales and Eurozone employment data wore on the common currency, the Euro’s drop was primarily the result of Eurozone CPI dipping from 1.1 per cent to 0.7 per cent, a four year low.
Yesterday’s unexpected inflation decline boosted speculation regarding the European Central Bank cutting interest rates further and saw the Euro fall against the US Dollar by the most for over twelve months. German inflation also declined in October, despite economists forecasting that it would stay the same.
As one industry expert comments; ‘The Euro is being sold as weaker inflation data suddenly put an ECB rate cut back on the table. For the Euro to extend drops, we need to see an actual rate cut in Europe or a slew of strong data out of the US’.
The Euro is currently trading against the US Dollar in the region of: 1.3526
While yesterday’s US employment data was disappointing, the positive domestic budget report lent the ‘Greenback’ support as the North American session progressed, as did the expectation that today’s US ISM manufacturing index will show that the sector expanded in October, albeit at a slower pace than in September.
The Euro also came under pressure this morning as Greek manufacturing PMI contracted at a faster rate in October, falling from 47.5 to 47.3.
In a statement issued with the data Markit economist Phil Smith asserted; ‘After having hit a 44-month peak in August, the headline PMI has since posted back-to-back falls for the first time since early-2012, leaving it comfortably inside contraction territory and suggesting a return to growth in the manufacturing sector is unlikely this year. […] October also saw the rate of job shedding at manufacturers pick up for the first time in seven months, boding ill for broader unemployment figures.’
French manufacturing PMI, scheduled for release on Monday, is also expected to show contraction.
With additional Eurozone news limited, further Euro fluctuations are likely to be the result of UK and US news.
Euro (EUR) Exchange Rates
As of 09:15
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3526 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8458 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4281 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6345 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4107 <