All Factors Favor Euro’s Rise

Today, the euro benefits from weakness of the US dollar, just like other currencies. However, the greenback’s fall is not the only driver for a rise in the most traded currency pair. Macroeconomic reports from the eurozone have boosted demand for the single european currency. First of all, let us pay attention to the statistics from Germany. The largest European economy has demonstrated good results. According to official data, the GDP grew by 0.8% in the third quarter. In annual terms, the German economy expanded by 2.3% that came in line with the consensus forecast. At the same time, the business activity in Germany increased as well. The preliminary estimates of Market Economics showed that the Manufacturing PMI rose to 62.5 points where the Services PMI advanced to 54.9 points versus the previous reading of 54.7 points. France also released upbeat economic reports.

As a result, the Composite PMI in the eurozone hit the 6-year high, rising from 56 points to 57.5 points. Does it signal that the economic conditions in the currency bloc improved? Surely, it does. However, these data can hardly change the attitude of the ECB policymakers towards the monetary policy stance, as the stable inflation rate is more important for them. Additionally, there are other factors that influence the dynamics of the euro. It seems that the Fed officials do not intend to hike the interest rate in December. At any rate, this is the conclusion that can be drawn after the minutes of the FOMC meeting have been released. It has already put the greenback under pressure and is likely to dent its rise further on. Therefore, the single European currency has a chance to end this trading week at the level of 1.1875. Anyway, the euro may gain solid profits by the end of this trading week as on Friday the market will close earlier as it will be the Black Friday.

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