The euro climbed today even though the European macroeconomic indicators were rather unfavorable. The broad-based weakness of the US dollar was the major reason for the rally of the shared 18-nation currency.
Today’s macroeconomic indicators were very negative, adding to evidence of Europe’s economic struggle. German factory orders contracted 5.7 percent in August. The Markit Eurozone Retail Purchasing Managers’ Index fell from 45.8 in August to 44.8 in September, demonstrating the sharpest decline of the sector since April 2013. The Sentix Investor Confidence index for the eurozone declined from -9.8 in September to -13.7 in October.
Despite all the negative data, the euro demonstrated a moderate bounce today following the big slump on Friday. The common eurozone currency joined other currencies in a rally after the dollar halted its run to the upside, while absence of additional quantitative easing from the European Central Bank was also playing in favor of the euro.
EUR/USD advanced 1.1 percent to 1.2645 as of 19:58 GMT today after falling 1.2 percent on Friday. EUR/JPY climbed from 137.28 to 137.61, and EUR/GBP rose from 0.7839 to 0.7867.
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