FX Headlines: Mixed but Upbeat PMIs Allow Euro, Pound to Retain Gains
- Euro remains elevated as ECB refrains from LTRO and cautions against another.
- Discrepancy in forecasts, has Sterling rallying after PMI Services data.
- Growth momentum in Europe has seemingly found equilibrium, now that outsized gains have come to pass.
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EURO-ZONE ECONOMIC CALENDAR
The Euro is streaking higher as the top performer today after the slew of economic data this morning suggested that European growth was settling in at a modest pace. The past few days and weeks data had started to sour, suggesting that the midyear spurt of growth may have been a one-off occurrence. Now, using the PMI surveys as proxies, it seems that growth has found equilibrium.
While German and Spanish PMIs this morning disappointed, the Italian PMI Services report for September jumped sharply back into expansion territory, and Euro-Zone Retail Sales for August showed improvement in both the headline and prior readings. The data on the whole has been viewed as EUR-positive, as it fits in neatly with ECB President Draghi’s calls yesterday for resisting another LTRO as the region attempts to find growth footing organically in the near-term.
UK ECONOMIC CALENDAR
The British Pound has seen additional support following the September PMI Services release, despite the actual (60.3) missing the Bloomberg News consensus forecast (60.5). As Currency Strategist Ilya Spivak noted in the DailyFX Real Time News feed, this may be due to the discrepancy in the Reuters forecast (60.0). Nevertheless, according to the PMI surveys, the UK service sector just finished its best quarter in 16 years, capping what has been a remarkable turnaround in UK eocnomic data over the past several months.
SWISS ECONOMIC CALENDAR
There are no data due for the Swiss Franc on Thursday, October 3.
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--- Written by Christopher Vecchio, Currency Analyst
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