The euro is on the rise in early trade on Friday after slumping 0.2% in the previous session. The euro closed on Thursday at US$1.0788 after striking a fresh 34-month nadir of US$1.0775.
EUR/USD has pushed higher and is attempting to push through US$1.08 at 08:00 GMT on Friday.
German Manufacturing PMI To Drag Euro Lower?
The euro is edging higher as investors look ahead to a slew of PMI data releases from across the eurozone. Analysts are expecting the data to show ongoing weakness in the manufacturing sector, which could see the euro extending its slump.
The biggest focus will be on the all-important German manufacturing PMI. Analysts are predicting that the sector will contract further in February, after contracting at a slightly slower rate in January. Analyst have pencilled in 44.7 on the index, down from 45.1, whereby 50 separates expansion from contraction. However, even this level could be considered optimistic.
Germany is an exporter nation which heavily relies on sales to China. The sector is already experiencing a downturn as industrial production and factory orders dived. Now the PMI’s could reveal the impact of coronavirus
The coronavirus started in mid-late January however it only really started grabbing headlines in February. The PMI’s are a forward look survey and so could be the first real indication of how it is impacting German industry.
France’s services PMI is expected to be the only figure which is expected to increase, and only slightly from 51 to 51.3.
Later, investors will also look towards the release of Eurozone inflation data. Expectations are for inflation to have declined -1% month on month in February.
Manufacturing PMI’s To Show End Of US Manufacturing Recession?
The dollar has rallied strongly across the week, supported by safe haven flows as fears over the spread of coronavirus and its impact on the global economy rise.
Today US PMI’S will also be in focus. Analysts are expecting activity in the US manufacturing sector to remain in expansionary territory for a second straight month; a sign that the US manufacturing recession sparked by the US – China trade war is over. Investors will be keen to see if there is any sign of the impact of coronavirus fears starting to show in these forward looking surveys.