Euro totters to seven-week low as PMI data fails to prevail ECB setback


by   |  VIEW 372
Euro totters to seven-week low as PMI data fails to prevail ECB setback

On Friday, the 24th of January, the eurozone currency fell to a seven-week low to $1.1031 against its American counterpart, as eurozone PMI (Purchasing Managers’ Index) data revealed on Friday (January 24th) had failed to outweigh ECB (European Central Bank) policy related concerns, while on the contrary, adding a double whammy to the euro, Friday’s faltering PMI data that showed the Markit eurozone composite PMI data falling to 50.9 compared to a forecast of 51.2 and the Markit Eurozone service sector PMI drowning to 52.2 missing a forecast of 52.8, had spurred up concerns further that the ECB might pursue a negative depository rate and an unchanged borrowing cost at least until the end of 2020.

Concomitantly, although the German PMI data had added a shimmering ray of hope to eurozone economy, yet botched to avert the worst beginning of the year for the eurozone currency which had shrugged off 1.50 per cent this month this far and was trading at its lowest levels since December 2nd at $1.1031, while against the British currency, euro was hovering near a five-week low.

Besides, since euro outlook became much gloomier following yesterday’s (January 23rd) ECB policy meet and the bloc’s currency nosedived to a 33-month low figure against the safe-haven Swiss Franc, a head of FX at State Street Bank, Kazushige Kaida said on Friday’s (January 24th) midday European trading hour, “Some people were hoping that (ECB chief Christine) Lagarde could talk about the possibility of policy normalization after Riksbank ended negative interest rates late last year. But there was absolutely no such indication from her. ”