Yesterday provided little to shout about in terms of influences from the Eurozone as events in the UK took centre stage, as expected. Consequently, the single currency was pushed to an even weaker position against sterling resulting in the sterling-euro rate edging above 1.22 for the first time in over a year. Continuing with the trend for this week, yesterday saw the euro fluctuate within a relatively narrow range against the US dollar. One piece of positive news was the Spanish government raise €10 billion on the debt markets at reasonable interest rates and that the offering was four times oversubscribed. This follows the trend seen elsewhere this year, with the Eurozone countries who have suffered most during the crisis have been able to raise significant amounts on the debt markets at sensible interest rates. This highlights that investors think a meaningful recovery is underway in the Eurozone.
Today is set to be a busier day for the eighteen-nation currency as reactions are expected following the morning’s French and German Flash Manufacturing data. The French Manufacturing sector has been performing poorly recently and while key economists are not expecting growth this month, we are expecting to see an improvement on last month’s figures.
A notable increase in productivity may boost the euro, whereas more contraction than expected will have the opposite effect. Outside of these releases, a number of other key data sets are due to be released, including the Eurozone Flash Services Purchasing Managers Index and Current Account figures, which may have a bearing on performance.
After a week in which, so far, the single currency has not been master of its own destiny, expect greater movements in the euro today in response to the busiest day of the week in terms of Eurozone data releases.
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