RTTN:Euro Pares Gains After Eurozone Dec. Inflation And PMI Data
(RTTNews) - The euro erased some of its previous session's gains against other major currencies in early deals on Wednesday as weakness in European equities overshadowed positive reports that showed the eurozone inflation and private sector downswing slowed in December.
Eurozone inflation slowed in December as expected by economists, flash estimate from Eurostat showed today. Consumer price inflation came in at 2.8 percent in December, in line with expectations and down from 3 percent in November. However, the inflation continues to stay above the central bank's target of 'below, but close to 2 percent'.
At the same time, contraction in Eurozone's private sector output was slower than initially estimated in December, the latest survey data released by Markit Economics showed today.
The composite output index, that measures activity in both manufacturing and services, rose to a 3-month high of 48.3 in December from 47 in November. A reading below 50 indicates expansion of the sector. The latest score was above the flash estimate of 47.9, suggesting slower than expected contraction in overall output.
German private sector expanded in December as previously estimated, final survey data from Markit Economics showed today. The final composite output index, that measures activity in both manufacturing and services, rose to 51.3 in December from 49.4 in November. This matched the flash estimate. A PMI reading above 50 indicates expansion of the sector.
Majority of European equities fell today, snapping four days of gains, amid lingering worries over the European debt crisis. Thus far, Germany's DAX fell 0.55 percent and France's CAC-40 index slipped to 0.47 percent, while the U.K. FTSE 100 index inched marginally up by 0.1 percent.
Greece may be forced out of euro if leaders failed to agree on the second bailout package in three months, reports said. European leaders have proposed a second loan package worth EUR 130 billion to Greece as the first EUR 110 billion bailout proved insufficient to stabilize its public finances.
The common currency failed to resume yesterday's rally versus the dollar, with the pair slipping below the support line around the 1.3030/25 area after having tested Tuesday's 6-day high of 1.3077 at the beginning of the European session. As of 5:55 am ET, the euro-dollar pair moved closer to 1.30.
The euro-yen pair also reached below the short-term support line around the 99.85 level, slipping as low as 99.72 around 5:55 am ET. On the downside, the common currency is poised to test Monday's fresh 10-year low of 99.39.
(RTTNews) - Against the pound, the single currency shed more than 20-pips following the eurozone PMI data to reach a low of 0.8325 around 6:00 am ET. The euro-pound pair is thus approaching its Asian session's 2-week low of 0.8320.
Construction activity in the U.K. improved in December, but concerns over future market conditions and low client confidence weighed on firms' optimism. The seasonally adjusted Markit/Chartered Institute of Purchasing & Supply (CIPS) Purchasing Managers' Index posted 53.2 in December, up from 52.3 in November.
At the same time, the number of mortgages approved in November totaled 52,854, up from 52,786 a month ago, the Bank of England said today. The expected figure for November was 52,800. Total lending to individuals rose by GBP 1 billion in November, in line with the previous six-month average. The annual growth rate was unchanged at 0.9 percent.
The common currency that climbed to a 6-day high of 1.2201 against the Swiss franc around 3:10 am ET eased as low as 1.2185 by 5:30 am. The pair is presently quoted at 1.2190.
Looking ahead, the US factory orders for November are slated for release in the New York session. Factory orders are expected to increase 1.9 percent in the month following a 0.4 percent contraction in October.
