Unexpectedly, business growth recovered in the Eurozone this month which helped lift the Euro from a 2-week trough versus the U.S. Dollar. According to the data, Germany’s PMI reading at 51.8, higher than economists’ predictions of a decline to 49.5, indicated a strong rebound which suggested to some that the Eurozone’s economic driver could have found some momentum as it moved into the fourth quarter; the numbers offset France’s dismal showing, however, with a PMI decline to 47.3 from September’s 48.8. Analysts point out that any number below 50 is within contractionary territory.
As reported at 8:22 a.m. (BDT) in London the EUR/USD traded at $1.2662, moving away from the earlier low of $1.2614. The EUR/JPY was trading higher at 136.1890 Yen, up from the session low of 135.1955 Yen.
Eurozone Banking Sector a Concern Again
Analysts expect that the Euro’s recovery will not likely last as there are growing worries that the Eurozone’s banking sector could once again be in trouble after it was reported that nearly a dozen Spanish lenders had failed a stress test that was conducted by the European Central Bank. Final results are to be published over the weekend, thus the ECB refused to comment on the media report; 130 banks throughout the Eurozone took part in the process.