The euro was mixed today, rising against some currencies and falling versus others. There were plenty of reasons for the currency to fall, though robust macroeconomic data released on Monday was supportive of the shared 19-nation currency.
The number of new coronavirus cases continues to increase across Europe. Data suggests that some parts of the region experience the worst rates of infection in the world. One after another European countries return to lockdown, and that fuels concerns that the already fragile economic recovery will come to an end.
Adding to the woes of the euro was the outlook for additional stimulus from the European Central Bank. While eurozone overnight index swaps suggest that the chance for an interest rate cut this year is still lower than 50%, it was increasing lately.
Alleviating pressure on the euro to some degree was the manufacturing data from Markit released today. The final estimate for the eurozone manufacturing Purchasing Managers’ Index showed an increase to 54.8 in October from 53.7 in September, which exceeded market expectations and the preliminary estimate of 54.4. Indicators for specific countries were good as well. The positive data did not prevent a drop of EUR/USD, though, as manufacturing data in the United States was good too.
EUR/USD dropped from 1.1649 to 1.1624 as of 18:48 GMT today. EUR/CHF jumped from 1.0668 to 1.0698. EUR/CAD slumped from 1.5500 to 1.5406.
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