The euro (EUR) gained 0.16% on Thursday as Purchasing Managers Indices (PMIs) came out better-than-expected. However, trading activity remained subdued due to the holidays in the U.S. and Japan.
Possible effects for traders
The results of the latest PMI surveys showed that the downturn in eurozone business activity remains persistent but is easing somewhat. Although the figures indicated that the eurozone’s economy may contract again this quarter, the market’s reaction was primarily bullish. Furthermore, European Central Bank (ECB) officials have recently suggested that interest rates may have to remain higher for longer. Pierre Wunsch, the Belgian policymaker, told the German newspaper that there is a possibility for another rate hike.
EURUSD was essentially unchanged during the Asian and early European trading sessions. Today, two important events may affect the currency. Germany will release its Ifo Business Climate report at 9:00 a.m. UTC. Then, the S&P will publish U.S. PMIs at 2:45 p.m. UTC. Both reports will shed more light on how businesses in the two countries consider their current and future economic conditions. S&P PMIs should add extra volatility to the market. EURUSD may rise above 1.09400 if U.S. PMIs come out lower than expected.
