By TraderVox.com
Tradervox (Dublin) – The USD is nearing above the initial resistance signaling the end of the recent downward trend registered yesterday. Many analysts have taken this to mean that upward trend is gaining momentum. Euro declined after the Manufacturing and Services Purchasing Manager’s index came below the expectation.
Economists and investors had expected the Euro region PMI composite indicator to come at 49.6 but the actual value has been reported at 48.7. The economists also expected the PMI manufacturing to come in at 49.5 but came in at 47.7. The services sector registered a value of 48.7 against an estimated value of 49.2. These readings indicate that the euro market contracted during this period.
Both France and Germany, which are the region’s greatest countries registered weaker than expected values. The values showed that both markets contracted with German PMI coming at 48.1 for March from 50.2-value registered for February. The European session opened to the news of lower than expected Chinese PMI result weakening risk appetite hence increasing the value of the dollar against major currencies.
The negative reports from the euro zone indicate that the region’s crisis is far from over and much more will have to be done to bring the situation back to normal. Despite the euro zone leaders’ positive comments about the situation in Greece, it seems like investors are shying away from the region. Comments by one of the ECB’s member that the ECB should gradually exit the crisis mode may not augur well with investors as reports indicate otherwise. Investors will now be keen on the efforts by the ECB to stick to its long-term refinancing operations as it maintains momentum for growth in the region.
The dollar rose against the euro by 0.4 percent to settle at 1.3159 after the results of the Euro zone PMI. The euro declined by 1.1 percent against the yen to sell at 108.98 at the start of the New York trading. China manufacturing figures negatively affected the Australian dollar declining 0.8 percent against the buck to sell at $1.0377.
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