The long-awaited moment for many investors has been reached: the publication of the PMI in the eurozone, corresponding to the month of June. The day Tuesday is loaded with solid data macros of the utmost importance for the Forex Market, and thanks to them, the price of the euro rose.
Also we will briefly observe the performance of other currencies in the Forex Market, as the australian dollar, the chinese yuan, the japanese yen and the Norwegian krone.
Below is a comprehensive analysis of the Forex Market…
Forex market: The price of the Euro rises thanks to data macros, such as the PMI
The private consulting company Markit published a PMI for the eurozone, introducing some figures of recovery more positive than expected. Highlights particularly the case of France, recovering after a fall of three months is without precedent.
The PMI French presented a reading composite was 51.3, with to 50.3 in the service sector and 52.1 in the manufacturing sector. The values were above expectations, and surpass the 50 point mark indicating growth.
The composite PMI of the eurozone gave a figure of 47,5, fifteen points above the 31,9 seen in may. Other interesting results were those of Germany, where the composite PMI rises to 45,8 points as in the service sector, and 46,9 in the manufacturing.
All of these values have a direct impact on the price of the euro, which increased by 0.6% and goes up to 1.1325 dollars. This is its highest level since the 16th of June, representing the hope of the investors in a possible economic growth.
Graph Euro vs. USD, indicating the increase of the value of the euro on the day Tuesday. Source: Yahoo! Finance
George Buckley, an economist at Nomura, writes about this feeling:
“The good news is that the activity is starting to rebound. The less positive is that demand is lagging behind and remains moderate (…) however, excluding the possibility of a second wave, the demand should also recover, albeit at a slower pace, as that will increase the confidence of consumers and businesses“.
The australian dollar and the japanese yen react to the statements of Peter Navarro
Since we know that the price of the euro goes up, other currencies also rose after the trade advisor of the White House, Peter Navarro, a retraction of his comment on the agreement, US trade with China. According to his words, the agreement had “terminated”.
Navarro said Monday that the trade agreement was still standing, after your previous comment avivara volatility in the markets. He said that the same had been taken “wildly out of context”. The president of that country, Donald Trump, expressed through a tweet that the trade agreement is “completely intact”.
The australian dollar experienced a rise of 0.7% up to 0,6950, after getting up 0,6977, its highest level since June 16.
Graphic AUD vs. USD, indicating the increase of the australian dollar against the us dollar. Source: Yahoo! Finance
The japanese yen, which was considered a safe haven, remains low against the dollar, in 106.47.
Graph of the decline of the japanese yen against the dollar. Source: Yahoo! Finance
The explanatory comment of Navarro benefited from a foreign exchange, but it hurt, somehow, to others. While the price of the euro increases, along with the value of the australian dollar, the yen did not manage to follow the same path.
Lee Hardman, analyst, foreign exchange at Mitsubishi UFJ Financial Group, elaborates his vision to the position of Trump and the market landscape:
“We hope that the consequences are limited and that president Trump to remain committed to the first phase of the commercial agreement in the period prior to the elections (…) however, the activity that has occurred in the price points that the forex market remains sensitive to the uncertainty of trade policy. Continues to be a potential trigger for higher volatility“.
While the euro increases, the chinese yuan and the Norwegian crown is retrieved
To finish, the chinese yuan offshore reduced many of its previous losses, being at a level of 7,0576 per dollar in the OTC market.
Graph of the value of the chinese yuan. Source: Yahoo! Finance
In addition, the currencies scandinavian, were also recovered. The Norwegian crown rises more than 1% against the dollar and 0.7% against the euro.
The price of the euro increases, and that is a good omen for a variety of analysts in the Forex Market. Although, it is clear that these oscillations were so strong in the coins arrive when the market is divided.
Between the hopes of a reopening economic in many parts of the world and the reappearance of the cases of infection by COVID-19, investors in the Forex Market are kept alert to any change.