Euro Hangs Tight Ahead of PMIs While the euro dropped to a fresh 8 month low against the U.S. dollar today, it ended the North American trading session unchanged. Softer economic data and a steeper slide in Eurozone versus Treasury yields put downside pressure on the currency but with speculators already holding significant euro shorts, the downside has been limited. Eurozone consumer confidence weakened in the month of July, which is not surprising given the slow recovery and geopolitical uncertainties. The big test for the euro will come from Thursdays PMI reports. Based on the decline in industrial production, factory orders and the ZEW survey, investors are bracing for a weak report. If activity in the Eurozone continues to slow, the sell-off in the EUR/USD could extend to 1.34. We are still looking for the currency pair to only spend a brief time below 1.35 but with market moving data scheduled for release over the next 48 hours, EUR/USD is vulnerable to additional weakness.
Posted on: Thu, 24 Jul 2014 09:21:14 +0000
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