Euro Rallies Higher Against US Dollar on Weak US ISM Data

The euro today rallied higher against the US dollar after the release of weak US ISM Services/Non-Manufacturing Composite data during the North American session. The EUR/USD currency pair was largely trading sideways during most of the European session due to the release of mixed Markit data from the Eurozone.

The EUR/USD currency pair rallied to daily highs above 1.1870 after the release of the weak US ISM data.

The Markit Italy Services PMI came in at 56.3 versus the expected 54.1, hence beating expectations. The Markit Italy Composite PMI also exceeded market consensus by coming in at 56.2 as compared to the expected 54.9. The Markit Germany Services PMI disappointed by coming in at 53.1, which was below the expected 53.5. The Markit/BME Germany Composite PMI also disappointed as it was recorded at 54.7 versus the market consensus of 55.1. The mixed Markit data from the Eurozone released during the European session kept the EUR/USD pair trading in a 30 point range.

The euro rallied higher against the US dollar after the release of the weak US ISM Services/Non-Manufacturing Composite, which came in at 53.9 versus the expected 56.9. Much of the euro’s strength can also be attributed to the stronger EUR/GBP after the Bank of England left rates unchanged.

The currency pair’s future performance is likely to be affected by the release of the Markit Germany retail PMI and the US change in non-farm payrolls, both scheduled for tomorrow.

The EUR/USD was trading at 1.1878 as at 15:01 GMT having rallied from a daily low of 1.1829. The EUR/GBP was trading at 0.9037 having risen from a low of 0.8922 earlier today.

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