Euro reaches 12 month low vs. the dollar amid concerns for the currency union's recovery
02/Sep/2014 • Currency Updates•
A quite week so far with markets focusing on major events towards the end of the week.
Yesterday morning the UK manufacturing PMI came out lower than expected at 52.5 (55.1), but only had the effect of weakening the pound by 0.1%. Mortgage approvals came in marginally above expectation for the month of July at 66.6k.
All in all a dull day for sterling with commentary focusing on a poll released last night showing a more decisive victory than first thought for Salmond at last week’s debate. As to what a restructured UK will look like, this is up in the air.
Ahead today there is little that will excite the markets with solely construction PMI being released at 03:30.
Monday saw primarily tier two data released with Eurozone. Manufacturing PMI released marginally under expectation at 50.7.
The figures have been dragged down by weak data from two of the leading economies namely France and Italy showing poor results below the neutral 50. In contrast Greece and Spain, those hardest hit, have released positive data. This however has had little effect due to the weighting they are allocated, but nevertheless positive news for two of the hardest hit in the common currency.
The geopolitical issues concerning the Ukraine crisis deepened amid a draft NATO proposal to deploy 4,000 troops to the conflict area. This will be decided in Wales later in the week. Furthermore the euro slumped further to a 12 month low vs. the dollar as investors bet against the currency ahead of the ECB meeting later in the week.
There is little data of note out today.
With our American counterparts taking the day off yesterday we saw a very stable dollar.
Despite this the dollar rose to a 7 month high against its major counterparts as positive data last week grew the possibility of a Fed rate hike.
Today we have ISM manufacturing released at 14:00 with anything above expectation (56.8) likely to strengthen the greenback.