Euro Stable Ahead of Employment Data
As currency traders eye Friday’s non-farm payroll report, the Euro has remained caught in a tight range. The yield differential between European and US rates has been stable, after reaching a new high for the move near 25 basis points on Monday. Retail Sales in the Euro Zone came in worse than expected while services PMI’s also showed relatively softness.
UK reported services PMI at 58.3 vs. 59.0 consensuses. This comes after slightly softer than expected manufacturing PMI and firmer than expected construction PMI. No action is seen at the BOE meeting tomorrow. Instead, Governor Carney is expected to provide more clarity on forward guidance with the release of the BOE inflation report on February 12, 2014.
The Euro zone reported December retail sales printed at -1.6% month over month versus -0.7% consensus and a revised 0.9% in November. The consumer continues to remain on the sidelines which are an issue for growth prospects. Final services purchasing managers readings were also reported for a variety of euro zone countries.
Italy and France saw readings were slightly firmer than expected at 49.4 and 48.9, respectively, while Germany saw a weaker than expected reading at 53.1. The euro zone composite reading was 52.9 vs. the 53.2 consensus, mirroring the softer than expected services component.
The Euro continues to trade below a downward sloping trend line that connects the lows in November to the low in January. Momentum on the currency pair is negative with the MACD (moving average convergence divergence) index printing in negative territory. The relative strength index (RSI) moved lower with price action reflecting accelerating negative momentum and is printing near 40 which is the lower end of the neutral range.
Sorry. No data so far.