The EUR/USD traded on a strong note after PMI data supported the eurozone recovery pushing the euro as high as 1.3452 as the US dollar was erratic due to FOMC minutes and erratic data. The euro closed at 1.3381 well within its recent trading range. Over the past weeks and months, we have seen early speculation turn to consensus for the FOMC to make the first reduction in the $85 billion-per-month QE3 stimulus program at its September 18-19 policy gathering. Traders can see the progress of this pricing effort starting back in early May when the US 10-year Treasury yield began its incredible 70 percent rally. Given industrious investors bought US government bonds to ‘front run’ the Fed’s purchases, it makes sense that these would be the first to be sold off on the first sign of an end to the regime. Euro area services expanded in August for the first time in 19 months, led by Germany, after the 17-nation currency bloc’s economy emerged from a record-long recession. An index based on a survey of purchasing managers rose to 51 from 49.8 in July, London-based Markit Economics said today. Economists forecast an increase to 50.2, according to the median of 32 estimates in a Bloomberg News survey. A reading above 50 indicates expansion. Gross domestic product in the euro region rose 0.3 per cent in the three months through June after six quarterly contractions. The expansion was led by the region’s two biggest economies, Germany and France. At least four euro countries remain in recessions, including Italy and Spain.
Posted on: Tue, 27 Aug 2013 11:23:52 +0000
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