The euro fell today to a new low and has stayed volatile as European data is reported and markets prepare for tomorrow’s ECB meeting.
The single block currency fell against the US dollar from 1.23731 to 1.23206 within minutes of opening trade in anticipation of data throughout the Eurozone. Since the mixed data was released, the euro has fluctuated around the lower mark as Mario Draghi prepares to address Europe tomorrow on the decision regarding economic stimulation and asset bond buying. As US trading opened the EURUSD fell again.
MT4 Chart: EURUSD
PURCHASING MANAGERS' INDEX DATA
Spanish Services PMI fell to 52.7, below expectations 56.2 and previous 55.9
The loss of momentum in Spain’s service sector from last month’s figure shows lack of activity. Staffing levels stayed level and service providers recorded a slight increase in input costs and a decrease in output. 52.7 is the lowest PMI recorded all year.
French Services PMI (Nov) fell slightly to 47.9 from expectations of 48.8 and previous of 48.8
The fall in French services highlights the weakness in the domestic private services, which does not bode well for hopes of reducing the high unemployment figure.
Italian Services PMI was up to 51.8, 0.9 above the 50.9 forecast and previous of 50.8
For the second month Italy has reported an increase in services activity but decreasing employment, a fall in output charges and faster rises in input costs are not good for the short term.
European Final Services PMI fell to 51.1, below expectations of 51.3 and previous of 51.3
Contraction in Europe business activity as a whole is spelt out by the final services PMI figure not reaching expectations even though heavy discounts have been made available throughout the month.
EUR Retail Sales m/m of 0.4% did not reach expectations of 0.6% but increased from previous of -1.2%
Retail sales as opposed to services increased but did not reach expectations. Non-food products and automotive fuel showed an increase of 0.7 percent but food stayed unchanged and more significantly, drink and tobacco products that provide high government taxes, also remained the same. Private consumption is forecast to increase due to real wage growth and with a rise in spending towards the Christmas period.
EUROPEAN CENTRAL BANK MEETIING
Mario Draghi, president of the ECB will meet tomorrow with the governing council to discuss the programme of bond buying, hoping to push the recovery of the European Union and decrease the potential of deflation. But some members are not convinced of the next stage of stimulus bond-buying, therefore tomorrow’s meeting is keeping the EUR in fluctuation.
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