By: Barbara Zigah
The Euro took a large hit yesterday following several reports which showed that sentiment among the manufacturing sectors embedded throughout the Eurozone declined last month, suggesting to investors that global growth is slowing more than expected. Some traders believe that the Euro is likely to further downtrend in the coming days, ahead of the growing likelihood that the ECB will soften its currently hawkish stance when their policy setting committee meets next week.
As reported at 3:08 p.m. (JST) in Tokyo, the Euro was steadying near $1.4262, slightly above the 3-week trough of $1.4227 struck in yesterday’s trading session. BNP Paribas analysts believe that, if the ECB should hint that they intend to pursue a more dovish tone then the Euro could slip below the recent bottom range of $1.41 to $1.45. Other commodity linked currencies also fell in Asian trading; the Australian Dollar slipped against the U.S. Dollar by some 0.2% to $1.0709.
The markets’ attention will be drawn to Washington, D.C., when the U.S. Labor Department releases the key non-farms payroll data. If the data comes in unexpectedly poor, it will put additional pressure on the U.S. Federal Reserve to do more to stimulate the economy and improve the dismal labor situation in the U.S.