Yesterday morning we saw the release of both the services and manufacturing purchasing managers’ indices for the euro-zone. These help to indicate productivity in the services and manufacturing industries, which in turn contribute to perception of a country’s economy. European manufacturing data was as forecast whilst services data disappointed slightly. When looking at the breakdown, Germany, the economic backbone of Europe, disappointed, which is always cause for concern. On the other hand, French data surprised by pulling above the key 50 mark, which shows that the sector is growing rather than contracting. The market initially traded the euro lower on the release, but as the day progressed confidence was somewhat restored and the euro regained most of its losses and even saw good gains against sterling and the US dollar post 5pm.
Today has the potential to spur movement in euro against other currencies, as German business climate data is released in the morning, followed by rhetoric from the European Central Bank (ECB) President Mario Draghi in the afternoon. Investors will be listening closely to Draghi’s words for any indication of central bank activity; any surprises could lead to movement for the euro.
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