The Euro managed to regain ground against the Pound on Monday following the release of data which showed that all of the Eurozone’s peripheral countries saw a rise in manufacturing activity in January.
The final Eurozone Manufacturing Purchasing Managers Index compiled by Markit showed that Eurozone activity climbed to 54 in January a solid improvement over December’s reading of 52.7 its highest level since May 2011. A figure above 50 indicates expansion.
The highlight of today’s data releases was the PMI out of Greece which showed that manufacturing activity in the country soared to a 65-month high of 51.2, it’s the first time the figure has been over the 50 mark since August 2009. Spain also posted a solid figure of 52.2 which was a 45-month high.
“Spanish manufacturing activity rise at the fastest rate for 45 months (up to 52.2 from 50.8) while Italian manufacturing expansion (down to 53.1 from 53.3) almost matched the 32-month high achieved in January. This fuels hopes that sustainable Spanish and Italian recovery really is now gradually developing. Furthermore, Greek manufacturing activity (up to 65-month high of 51.2 from 49.6) expanded in January for the first time since August 2009, suggesting that there is a real chance that Greek GDP could finally stop contracting overall in 2014,” said Howard Archer of IHS Global Insights.
Germany saw its PMI jump to a 32-month high and even France (which was the only nation to post below the 50 level) saw its PMI climb to a 23-month high.
Today’s data will be a sigh of relief for the European Central Bank which has come under increasing pressure to take further action following last week’s report which showed that unemployment remained at record highs.
Deflation remains the main risk to the Euro and all eyes will now look ahead to Thursday’s ECB interest rate decision and press conference for any sign to a change of the Central Bank’s monetary policy.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3509 ,
Euro,,British Pound,0.8276,
Euro,,Australian Dollar,1.5345 ,
Euro,,Canadian Dollar,1.4956 ,
[/table]
