Euro Stops Moving Sideways

Yesterday, the single European currency was trading flat against the US dollar, however, today, it managed to gain grounds. The EUR/USD pair climbed into the zone above 1.23 and reached 1.2340. The euro grew amid the weakness of the US dollar. Analysts note the single European currency is supported by the optimism of traders ahead of the ECB meeting. Investors are sure that there will not be any changes in the ECB monetary policy, but they hope to see signs that confirm the intention of the banks to start the quantitative easing program winding down this fall. It is also time to pay attention the release of preliminary data on business activity in the eurozone and Germany. Thus, the German production sector continues to expand. The corresponding index fell to 61.2 in January, which is below the forecasts of the analysts. Meanwhile, Germany”s business activity in the service sector shows a rapid growth. The Services PMI rose to 57 in January from 55.9 in the previous month.

Meanwhile, the eurozone statistics turned out to be better than expected. The Composite PMI soared to a 12-year high of 58.6. The Services PMI jumped to 57.6, while the manufacturing index slowed down to 59.6 from 60.6 in the previous month. Depite this data, experts see strong growth of the economy of the region. However, the published data did not encourage market participants and failed to produce a strong effect on the movement of the euro against the US dollar. Currency strategists expect traders to start fixing profits on buy deals in the near future.

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