Euro stalls after mixed data

The Euro continues to trade in a tight range against the US dollar in today’s European trading session as traders largely ignored a mixed round of data released from Europe earlier today.

The Eurozone manufacturing sector activity unexpectedly contracted further in April, the latest manufacturing activity survey from S&P Global research showed on Friday.

The Eurozone Manufacturing Purchasing Managers Index (PMI) hit the market at 45.5 in April against analysts’ expectations for a figure of 48 and down from the previous month’s figure of 47.3 and marks a nearly 3 year low.

The bloc’s Services PMI jumped to 56.6 in April against predictions for a figure of 54.5 and also higher than last months figure of 55 which marks a 12-month high.

The S&P Global Eurozone PMI Composite jumped to 54.4 in April against expectations for a figure of 53.7 which was exactly the same figure that was released to the market last month.

The lack of movement regarding the above news in the EUR/USD currency pair came as no surprise as at this moment it seems as market participants are squarely focused on interest rates and in particular what the US Federal reserve and the European Central bank plan to do with them moving forward.

Looking further ahead today, the main driver of the EUR/USD currency pair will be the release of the Global composite PMI and Global composite manufacturing index from the US which is one of the key indicators of business confidence.

A strong reading from this sector will only increase the odds of a rate hike next month by the US Federal Reserve which already stands at around 70 percent.