Euro Gets Some Relief Following German Business Survey
The euro made a modest recovery late on Tuesday and traded steadily at $1.2856 at 7:00 GMT on Wednesday morning.
The common currency suffered through the beginning of the week after PMI data confirmed the region’s slowdown. However, a glimmer of hope from Germany coupled with a dollar sell off lent some strength to the currency.
Data out Tuesday showed that eurozone business activity failed to meet expectations in September, something that will likely put more pressure on the European Central Bank in the coming weeks.
The eurozone’s Markit Composite Flash Purchasing Managers’ Index fell to 52.3 in September, a nine-month low. The reading reflects firms’ consistent price cuts over the past two and a half years.
The PMI data suggests that the European Central Bank’s attempts to ease further over the summer have not been enough and support claims that the bank needs to roll out an asset purchase program in order to reignite the region’s economic growth.
The common currency did see some support after a business survey from Germany showed that the eurozone’s largest economy probably grew in the third quarter. The news coincided with a dollar sell off prompted by the greenback’s 10-week rally and helped boost the euro, albeit only slightly.
Reuters reported that the currency’s lift may only be temporary as many analysts recommend selling into the rise. Though Germany’s positive survey may have felt like a breath of fresh air, the eurozone is still deeply weighed down by massive public debts and an inability to repair its financial system.
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