Monday’s European session was not that good for the EUR currency, the EUR/USD hitting just under 1.11 to set the daily low. At the moment of the news, the rate was -0.4% lower at 1.1084, the session’s low being set at 1.1082. From a technical point of view, the EYRUSD cross is going down towards the 200DMA (Daily Moving Average) set at 1.1026. The fundamental behind this fall lies in the release of poor manufacturing data for Germany and all Euro zone. The latest manufacturing PMI (Purchasing Managers’ Index) in Germany dropped from previous 52.3 to 50.2, while the service index registered only a slight increase from 55.0 to 55.1. For the whole Euro zone, the manufacturing PMI eased to a one-year low at 51.0 in the month of February, with a January reading of 52.3. On the long run, the EUR will remain subdued especially due to the concerns regarding a possible Brexit and also the risk-on track on which the European equities are set.
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On Wednesday, the German Ifo (Institute for Economic Research) Business Climate Index came out lower than then expected 106.8, at 105.7 in February versus a 107.3 reading in January. The index is at its lowest value since December, 2015. The Current Assessment sub-index published by the same authority went up to 112.9, surpassing market expectations of 112.0 and also January’s 112.5. The EUR/USD pair fell at 1.0989 in the European session, but managed to climb up until 1.1020. The momentum reversed when US mixed data came out and at the moment of writing the pair is trading 0.21% below the opening price at 1.1005. The US data consists in a fall of the Consumer Confidence Index to 92.2 in February (under the expected 97.0) and a drop of the Richmond Fed Manufacturing Index to -4. The positive side of the release consists in the rise of home sale by 0.4% in the month of January, the second highest hike since 2007.
Yesterday, crude started the session with minor gains, but quickly turned to the negative side with the WTI (West Texas Intermediate) going back to the $32.00 per barrel area. After Monday’s hike towards the $34.00 per barrel handle, the WTI price lost ground due to Iran’s latest comments, according to which they changed their opinion and now consider the “freezing their output”. Also, the Saudi prime minister added that they already ruled out the output-cut solution. In addition to those facts, the pressure is being built also by the greenback that is trading in a bullish trend.
