The Euro has received some support as we travel through the European trading session after a better than expected round of business data from Germany and the Eurozone as a whole adding evidence that the European economy is slowly but surely grinding higher.
Markit manufacturing PMI figures from Germany hit the market earlier today at 57.6 against analysts’ expectations for a figure of 55.8 while the same figure from the Eurozone came in at 57 against consensus for a number of 56.
The EUR/USD pushed higher immediately after the news, but the party may be short lived as we head into the emergency NATO summit later today where the main question of further sanctions against Russia will be on the table due to their aggression against Ukraine and any new sanctions are likely to create further uncertainty to the European economy which in turn will pressure the Euro.
Even before the summit begins, the UK has promised to double the amount of missiles it will be sending to Ukraine to help with their defense and if some of the other NATO countries follow suit, it will mark a new phase in the level of the conflict and may just be a game changer.
Looking ahead further today on the economic calendar, we may see some movement in the EUR/USD currency pair with the release of the latest durable goods orders from the US followed by a monetary speech from European Central Bank board member Frank Elderson which will be followed by another speech from Fed board member Christopher Waller.
The EUR/USD currency pair remains well supported at the $1.0988 level, but it is finding it hard to break and remain above the $1.1000 mark due to the conflict surrounding Ukraine and Russia as well as the uncertainty on the ECB’s intentions to deliver a rate hike at some stage this year.
Higher German yields, elevated inflation, and the continued economic recovery in the Eurozone euro for the time being above the $1.0900 level but that could quickly come undone with an escalation in the conflict.