A flurry of positive economic data from the Eurozone has failed to have any meaningful impact on the region’s single currency.
Italian, French and German services purchasing managers’ index (PMI) results all came out better than expected, at 52.9, 47.2 and 55.9 versus forecasts of 49.8, 46.9 and 55.4 respectively.
Shortly after the individual nation releases, the Eurozone’s equivalent figure also beat expectations, with Markit reporting a Eurozone services PMI at 52.6 versus a forecast of 51.7. In other European data, Eurostat reported Eurozone GDP (QoQ) at 0.3% and (YoY) at 0.5%, meeting expectations, and retail sales (MoM) at 1.6%, beating expectations of 0.8%.
As aforementioned, despite a brightening economic outlook for the Eurozone, the EURUSD is down for the day, hitting weekly lows at 1.3706 during the European morning session and currently trading just shy of 1.3730. The muted response suggests traders and investors still have one eye on the situation in Ukraine, and remain unwilling to expose themselves to excessive risk.
Elsewhere, the Sterling has fared better against its U.S. counterpart in response to better than expected services PMI data. The figure came out at 58.2, versus a forecast of 58.0. The services sector drives the UK economy, accounting for more than 78% of its GDP. The news boosted the Cable, with the pair currently up 0.31% for the day at 1.6717.**relatedarticle**
Looking forward to this afternoon, the EURUSD could suffer further on positive U.S. data, with ADP non-farm employment and ISM non-manufacturing PMI set for release during the U.S. morning session. The figures are forecast at 159K and 53.5%, both down slightly from 175K and 54.0 respectively.
A better than expected release in either could weaken the EURUSD further, likely down to support just shy of 1.3700. A worse than expected result will likely garner a muted response, as traders and investors look to the European Central Bank (ECB) rate decision and monetary policy conference scheduled for Thursday afternoon (European session).
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