The euro enters Monday’s Latin American session with a 0.3% gain and is outperforming all G10 currencies except the Japanese yen (JPY), according to a report by Sean Osborne and Eric Theort, chief FX strategist at Scotiabank.
German and French manufacturing PMIs show slight contraction
“The final Eurozone manufacturing PMI offered little change from the initial reading, remaining steady in contractionary territory just below the neutral threshold. The German manufacturing PMI was slightly lower at 48.2, and the French reading was still weaker at 47.8. The data was largely ignored, given the ECB’s neutral stance and expectations for relative central bank policy providing fundamental support for the euro.”
“The two-year German-US bond yield spread remains flat just below a 14-month high. The highlight of this week’s data will be the Eurozone preliminary CPI (November) due on Tuesday. The ECB’s calendar is full of 12 talks, and we remain attentive to any shift in messaging as some policymakers start to talk about upside risks to inflation.”
“The Euro has broken back above the 50-day moving average (1.1617) for the first time since mid-October and last closed above this level in early October. The RSI is tilted to the upside as it pushes towards 60, providing strong momentum as we head towards expected resistance around 1.1650 (mid-November/late October highs). Additional resistance is expected at 1.17 and 1.1750. We look to the range The immediate range is between 1.1580 and 1.1680.”
