Euro (EUR) Exchange Rate: Euro Restrained before tomorrow’s Growth Report
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While the European asset was able to edge higher against the US Dollar as Ukraine-based concerns eased, the Euro fluctuated against the British Pound following the publication of UK construction data.
Although the UK’s Markit construction PMI came in slightly below forecast levels, the report still showed a steep pace of output and signalled that the sector had weathered the recent (literal) storms comparatively well.
While the Pound initially advanced on the Euro after this report was published, gains were modest and the Euro swiftly recovered ground.
Key events for the week ahead
Purchasing Manager Index Services (March 5)
Eurozone Gross Domestic Product (March 5)
ECB Rate Decision (March 6)
ECB Deposit Facility Rate (March 6)
The common currency experienced minimal movement following the publication of the Eurozone’s producer price index.
The index showed that producer prices in the currency bloc declined by 0.3 per cent in January, month-on-month, following a 0.2 per cent gain in December.
Economists had expected a decline of 0.1 per cent.
On the year the producer price index was 1.4 per cent lower, slightly more than the 1.3 per cent annual drop anticipated.
Euro volatility expected tomorrow
While today’s news had little impact on the Euro, the common currency is likely to experience volatility tomorrow as French, German and Eurozone services reports are released. If the reports confirm that the German services index came in at 55.4 (above the 50 mark separating growth from contraction) and the Eurozone’s services measure achieved 51.7, the Euro could be supported before Thursday’s big ECB announcement.
Eurozone retail sales and fourth-quarter growth data will also be of considerable interest.
Currently the Euro is trading against the Pound in the region of 0.8248 and is trading against the US Dollar in the region of 1.3764