The latest PMI data out of the eurozone is weighing on the euro today. A reading that moved unexpectedly lower is weighing on the 18-nation currency as Forex traders contemplate continued slowed growth, even with the ECB’s efforts to boost the economy.
Many analysts, economists, and Forex traders expected to see an improvement in eurozone PMI today, but were disappointed when the actual numbers came out. Rather than moving higher, up to 52.3, the PMI for factories and services in the eurozone fell to 51.4 in November. Even though anything above 50 indicates expansion, the reality is that this is the lowest level for the eurozone in 16 months, and there are concerns that continued slowing could result in bigger problems for the euro area economy.
Indeed, many expect that now, after seeing that the ECB’s efforts to this point have been largely ineffectual in boosting the eurozone economy, there will be more stimulus efforts. Moves to boost the economy, including quantitative easing, are likely on the table for the ECB right now, and that means a weaker euro. The 18-nation currency is already down in anticipation.
At 11:43 GMT EUR/USD is down to 1.2536 from the open at 1.2543. EUR/GBP is also lower, down to 0.7995 from the open at 0.8001. EUR/JPY is down to 147.9510 from the open at 147.9930.
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