Euro Declines on Markit Eurozone PMI Data, Later Rebounds

The euro today traded lower against the US dollar after the release of mixed Markit PMI data from across the euro area in the early European session. The euro also headed lower shortly after the release of US personal consumption expenditure report in the early American session.

The EUR/USD currency pair today traded in a tight range marked by a high of 1.2213 and a low of 1.2162, but had broken higher at the time of writing.

The weak Markit releases including the Markit Italy Manufacturing PMI and the Markit France Manufacturing PMI contributed to the pair’s decline. Other positive Markit releases including the Markit Eurozone Manufacturing PMI, which came in at 58.6 versus the expected 58.5 could bot reverse the pair’s decline. The Markit/BME Germany Manufacturing PMI also beat expectations by coming in at 60.6 as compared to the expected 60.3. The Eurozone unemployment rate released by Eurostat and the Italian GDP report only had a short-lived impact on the pair.

The pair rallied slightly after the release of the US PCE report for January by the Bureau of Economic Analysis, which met expectations. The positive initial jobless claims report released by the Department of Labor also had a muted impact on the pair. The currency pair rallied much higher after the release of the US ISM manufacturing report.

The pair’s future performance is likely to be affected by tomorrow’s German retail sales, Italian GDP print, and the UoM consumer sentiment survey.

The EUR/USD currency pair was trading at 1.2217 as at 16:55 GMT having recovered from a low of 1.2153. The EUR/JPY currency pair was trading at 130.66 having rallied from a low of 129.85.

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