- Mixed PMIs as Euro Gains Ground
- USD Strength Could Return amid COVID Worries
- Markets Also Feel Pressure to End Week
The Euro forex market has still managed to gain some ground today above the 1.22 mark at least for now. This comes despite mixed PMI numbers which point to a possible contraction of the economy within the bloc. A slow vaccination rollout has hampered efforts to contain the coronavirus and led to increased restrictions in many countries. This has now been reflected in the data and could yet see a return to strength for the US Dollar. Markets on Wall Street are also feeling the pressure and look set to end the week on a low point.
Eurozone PMIs Fail to Impress
It was a very mixed bag today for the Eurozone in terms of economic data. The main figure of note, the Markit Flash Composite PMI showed 47.5. This is lower than the December reading of 49.1 and a concern for the region with anything below 50 indicating a contraction in economic activity. This does not come as a major surprise though since the continued spread of COVID-19 and its newest variants have come at the cost of a speedier reopening.
Many countries have recently reverted back to tighter restrictions that have curbed the economy even further. The good news though came as the same numbers for Germany, the largest economy in the region show a number of 50.8 which, added to the continued positivity of ECB President Christine Lagarde appears to have given the Euro a helping hand.
COVID Continues and Stimulus Reservations
These issues and more domestic concerns in the US could also see a return to strength in the US Dollar as a safe haven, though so far this has not been the case. There have though been concerns that the vaccination plan proposed by President Biden is “unambitious” in its aims to vaccinate 100 million Americans in his first 100-days. These are suggestions the President has rebuffed.
He will also speak later today where he will work to address reservations about his new $1.9 Trillion stimulus plan. The main worries here come from the Republican side and how such a plan may be paid for in the future with any tax increases. US PMI numbers will also be eagerly watched today by those forex trading and could be a key driver.
Stock Market Set to Open Lower
Forex brokers were not the only ones feeling the heat today. After a flat day yesterday on President Biden’s first full day in office, early trading on Wall Street suggests that markets will open lower again today with the Dow Jones expected to drop in excess of 200-points at the open.
This is not indicative of any wider trend but does suggest that those trading stocks are also taking pause toward the end of the week for reflection and awaiting any significant events to drive them forward amid a busy earning season.