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Euro Trades Sideways on Mixed Eurozone PMIs and ECB Minutes

February 21, 2019 at 17:12 by Simon Mugo

Counting 50-euro billsThe euro today traded with significant moves in both directions within a wide range as the single currency was buffeted by shifting investor sentiment throughout the session. Investors reacted both positively and negatively to various key developments during the day such as the Markit Germany Services PMI causing the EUR/USD pair to whipsaw within a wide range.

The EUR/USD currency pair today traded in a wide range defined by a low of 1.1319 and a high of 1.1367 and was within this range at the time of writing.

The pair spiked higher in the early European session following the release of upbeat services PMIs, but quickly dropped as concerns about the manufacturing sector emerged. The Markit eurozone services PMI rose slightly to come in at 52.3 versus the expected 51.3 and the previous 51.2. However, the Markit eurozone manufacturing PMI dropped to 49.2 missing expectations set at 50.3 and officially entering the contraction zone. The same scenario played out in Germany where the services PMI rose and the manufacturing PMI fell into contraction territory. The pair rallied higher after the release of the latest European Central Bank minutes, but quickly fell again.

The ECB’s Governing Council believes that the current slowdown is going to last much longer. The release of weak US durable goods orders and the disappointing Philadelphia Fed business outlook slowed down the pair’s current decline.

Tomorrow’s German GDP data and Mario Draghi‘s speech are likely to influence the pair’s future performance.

The EUR/USD currency pair was trading at 1.1332 as at 17:06 GMT having dropped from a high of 1.1367. The EUR/JPY currency pair was trading at 125.49 having fallen from a high of 125.87.

If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.

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