Better Month Start for Euro

The Euro enjoyed a stronger night after losing three percent against the Dollar and six percent against the Yen during January. The EURUSD climbed higher after the release of better than expected PMI data and now posts 1.3930 (see hourly chart).

Expert consensus still views the EURO has one of the weaker major currencies because of the ongoing fiscal concerns of Euro-zone’s member countries such as Greece and Portugal.

The EURUSD has a major support at 1.3850 and should price sustain a break below this level then the pair could experience further substantial declines.

The Dollar is also benefiting from an improved outlook for US interest rates after the strong GDP release last Friday. Overnight, the USDYEN rose to highs of 90.45 before retracting to 90.15.

There is a major event risk this morning w1th the US ISM Manufacturing Data due for release at 10.00am EST. A value of 55.6 is expected compared against 55.9 recorded last month.