A host of positive data from the manufacturing and services sectors across the Eurozone spurred improvements in euro rates yesterday. Flash Purchasing Managers’ Index (PMI) figures for the eighteen-nation bloc detailed a higher level of growth than expected in both sectors. The better-than-expected data sets come largely as a result of a strong performance from Germany, the Eurozone’s largest economy. The euro gained ground against sterling through most of the day, while gains made against the US dollar were largely reversed by the evening. The euro could perhaps have strengthened further given the strength of yesterday’s data; however, whilst the threats posed by low interest rates remain, the single currency seems to be struggling to strengthen more notably against other major currencies.
Today’s events have the potential to cause further movements in euro rates today as German Business Climate data comes out in the morning, followed by an address from European Central Bank (ECB) President Mario Draghi. The Business Climate data will give an indication as to whether the buoyancy suggested by yesterday’s data is reflected in the mood of the nation’s businesses, whilst Draghi’s address may contain clues as to the current likelihood of the prospects for negative interest rates and asset-purchases.
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