The Euro is little changed against the US Dollar after positive private sector data for January was countered by a report which showed that retail sales in the Eurozone fell sharply in December.
The single currency is holding just above a ten-week low against its US rival as a result of the mixed data reports. According to the data released earlier in the session the Eurozone’s private sector saw its strongest level of growth in more than two years in January.
Markit’s Composite Purchasing Managers Index (PMI) increased to 52.9 in January, up from the previous month’s figure of 52.1. The figure was the highest reading seen since June 2011 and was comfortably above the 50 mark which divides expansion from contraction. The report also marks the seventh consecutive month where output from the Eurozone has expanded.
Following the release of that report the Euro briefly pushed higher against the US Dollar. The gains were short lived however after a separate report released later in the morning showed that retail sales tumbled.
Sales tumbled by 1.6% month-on-month in December down from the 0.9% rise seen in November. Yearly, sales declined by 1% and were well below economist calls for an annual gain of 1.5%. The sharp decline wiped out the Euro’s earlier gains and increased concerns over the health of the region’s economy. The region is under threat from a painfully slow economic recovery and the risk of deflation.
All attention will be focused on Thursday’s European Central Bank interest rate announcement and following press conference for any hints of further stimulus measures being introduced to help support the region’s economy.
Euro (EUR) Exchange Rates