Euro Ignores Revised PMI Data, Looks Ahead to ECB Meeting
- Euro-Zone Manufacturing PMI (OCT F) confirms initial estimate.
- EURUSD falls slightly after data is released.
- Forex traders remain focused on Thursday’s ECB meeting.
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The Euro was little-changed after the final revision of October’s Eurozone’s Manufacturing PMI final figure confirmed the flash estimate for October. The reading increased to 51.3 from 51.1 in September.
While the pickup in the pace of factory sector activity is an encouraging sign for the Euro-Zone’s recovery, ECB President Mario Draghi has mentioned that such growth is still fragile. Inconsistency is one of the more worrisome factors at play: performance in Germany drove the increase of the region-wide result but France’s outcomes proved disappointing.
Perhaps more critically, the Euro’s muted response to the slight pickup in the headline PMI reading suggests the report failed to meaningfully reduce speculation about further ECB stimulus before this week’s policy meeting.
EUR/USD 5-minute Chart: November 4, 2013
Chart created by Cecilia Sanchez Corona using Marketscope 2.0
In this context, even though the Euro didn’t respond to the announcement, it could show some near term strength while adjusting to new upcoming scenarios. Traders began to drive the currency aggressively lower last week after the headline year-on-year CPI gauge unexpectedly dropped to 0.7 percent, the loest since November 2009.
-- Written by Cecilia Sanchez Corona, DailyFX Research.
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