Prior to the release of services PMI for Germany, France and the Eurozone the Euro was trading close to a six-week low against the US Dollar and a three-month low against the Pound.
In a comparatively heavy news day significant Euro movement could be on the cards. While the PMI data is likely to inspire fluctuations, today’s Eurozone retail sales and GDP figures (due out at 10:00 GMT) will also be of interest.
Already this morning data has revealed that Italian services PMI contracted by more than expected in August while French services PMI contracted by less than feared.
It is expected that separates figures will show that the Eurozone’s economy expanded by 0.3 per cent in the second quarter, quarter-on-quarter, while retail sales increased by 0.2 per cent from June to July.
The Euro/Pound pairing is currently trading in the region of 0.8464
However, even if the reports surprise to the upside economists are expecting the Euro to extend declines against the US Dollar ahead of US non-farm payrolls figures and the European Central Bank’s rate decision.
As senior currency strategist Yujiro Goto observed; ‘The Dollar is more likely to rise in the medium to long term. Should we continue to see nonfarm payrolls increase by about 150,000 to 160,000 the likelihood of a September tapering of Fed easing will remain intact’ – and the ‘Greenback’ will strengthen against peers like the Euro as a result.
The Euro could also soften further against the Pound as economists expect the currency to receive additional support from today’s UK services data.
Yesterday a stronger-than-anticipated UK construction index saw the Euro slip to 84.46 pence per Euro. Economists are expecting today’s services gauge to come in at 59.7, down modestly from the 60.2 recorded in July but still above the 50 mark separating growth from contraction. If the result meets or exceeds expectations Sterling could experience an additional boost ahead of the Bank of England’s rate decision.
Euro (EUR) Exchange Rates
As of 08:55
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3172 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8458 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4478 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6773 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3864 <