The euro had a poor day Tuesday, losing almost half a cent to the USD to finish around 1.1813 and falling against almost every other currency, although unchanged against the Pound at GBP/EUR1.1360.
Its drop came despite figures which confirmed the eurozone service sector registered quicker output growth in November, with the final PMI matching the flash estimate of 56.2. The final Eurozone composite index was also confirmed at 57.5 with the Press release noting breathlessly, “The rate of euro area economic expansion moved up a gear in November. Output growth accelerated to the fastest in over six-and-a-half years, while rates of increase for all of the main survey indicators covering demand, employment and inflation also hit multi-year highs… Growth was again led by a resurgent manufacturing sector. Manufacturing production rose at the quickest pace in almost seven years in November and the headline index from the manufacturing survey – the Manufacturing PMI – posted a level bettered only once in its 20-year history.”
The simple problem for the EUR at present is that whilst the economic news is almost without exception positive, it is well known and already ‘in the price’. It takes a stunning set of incoming data to produce a genuine shock.
With an absence of Eurozone economic indicators today, attention this morning will be on German data: factory orders then retail and construction PMI’s. EUR/USD opens in London this morning at 1.1835 with GBP/EUR around 25 pips lower at 1.1335.