The Euro racked up its biggest one-day gain in 9 weeks against the US dollar after a strong round of economic data from the Eurozone raised expectations that the European Central Bank may change their attitude with regards to lifting interest rates when they deliver the latest monetary speech on Thursday.
In yesterday’s European trading session, the latest consumer price index figures from Germany hit the market at 5.1% against analysts’ predictions for a figure of 4.7% while GDP figures from the Eurozone came in at 4.6% against market expectations for a figure of 3.9%.
The data shows that the Euro block is well on its way to economic recovery and may provide evidence that the worst of the Covid 19 pandemic is definitely in the past and things can only get better from here which is being felt as various countries in the Eurozone get back to business.
“Restrictions in many countries to counter the Omicron wave are set to be lifted soon, allowing the recovery to resume in the coming months,” said Jessica Hinds, senior Europe economist at Capital Economics.
Looking ahead today, it’s another busy day ahead on the economic calendar which kicks off with manufacturing sector PMIs from Italy and Spain which will be followed up with German retail sales figures as well as the all-important unemployment numbers.
During the American session we will see the release of the ISM Manufacturing PMI figures which is a key indicator of business confidence as well as the JOLT’s job openings for December which is a key indicator of the US employment market and may give an indication of what to expect from the non-farm payrolls numbers due out on Friday.
As we can see on the chart, the EUR/USD currency pair received significant support at the $1.1143 level and has managed to rally all the way to the $1.1243 mark so far in today’s trading session which was a former support level.
After yesterdays gains, it is hard to see a solid break of the $1.1243 mark in today’s trading session and we are likely to see the EUR/USD currency pair drift lower as traders book in some profits on the back of yesterday’s gains.