By TraderVox.com
Tradervox.com (Dublin) – The euro closed the week on high as EU summit decided to give fund to rescue banks in Spain. However, there has been opposition to this decision from member countries which is raising doubts about the outlook for the region. The Italian and Final Manufacturing PMI for the region lead to a decline of the euro while the unemployment report has been overshadowed by the sentiments from the region that some countries are against the EU leaders’ decision. All these reports were released on Monday, and they have already caused the euro to decline against the sterling pound. However, the US economy has been faltering with ISM Index showing a contraction in the manufacturing industry. Today, the market is waiting for the PPI data. Other events that will affect this cross are as follows.
On Wednesday, the Final Services PMI for the region will be released at 0800 hrs GMT. The services sector has been contracting for the last five months and this time round a small rise to 46.8 is expected. If the data indicate a decline, this will cause the euro to drop further. Another report to be released on this day is the Retail Sales data. It is expected that data will show a small increase of 0.2 percent; however, with disappointing data from Germany, the final number might be lower. The final report to look out for on this day is the Final GDP data which will be released at 0900 hrs GMT. The market is expecting the report to show stagnation as German data showed an expansion of 0.5 percent.
On Thursday, one of the main events will be Spanish bond auction; this will come just hour before ECB rate decision at 1145hrs. Most banks in Spain were downgraded and some analysts are saying that they will on the safe side for now. German Factory Orders report will be published at 1000hrs where the report indicated a drop of 1.9 percent in April; the report is expected to show an increase by 0.2 percent for May. On Friday the main event will be the German Industrial production where a fall of 2.2 percent was registered last time; but an increase of 0.3 percent is expected this time round.
With these reports affecting the euro/dollar pair; it is expected that the pair will be neutral this week.
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