The Euro recovered after earlier striking a 14-month low versus the U.S. Dollar after Markit Economics reported a rise in the preliminary readings for Germany’s PMI Reading Services suggesting that the country’s economy may have expanded this quarter, which is especially important as Germany is viewed as the Eurozone’s economic driver. The However, analysts point out that though the composite reading edged slightly higher to 53. The Euros gains are likely to be limited as the Manufacturing PMI came in slightly below expectations, and at a reading of 50.3, is sliding closer to the contractionary side of the 50.0 threshold.
As reported at 8:22 a.m. (BDT) in London, the EUR/USD struck a session peak at $1.2864 shortly after the PMI survey results were released, moving away from yesterday’s low at $1.2816; traders are wary however that a correction near support at $1.2800 is looming.
Fed Wants to See End to Dollar Rally
With the Euro’s rise, the U.S. Dollar Index lost nearly 0.2% to trade at 84.590 .DXY, moving away from Monday’s 4-year peak at 84.861 .DXY. The Index has gained for 10 consecutive weeks as speculators anticipate that the Federal Reserve Bank is likely to move interest rates higher long before either the Bank of Japan or the European Central Bank. The Dollar’s recent rally could complicate the decision making process for Fed officials said William Dudley, the head of the N.Y. Branch of the Federal Reserve, who pointed out that it could harm the country’s economic performance and keep already low inflation suppressed.