The manufacturing PMIs across the Eurozone all came in just above expectations which provided the single currency with continued support. This sort of data goes someway to justify Mario Draghi’s stance when it comes to monetary policy and serves to further support the consensus view that no action will be taken at tomorrow’s ECB meeting. Even unemployment for the region remained at 11.9% when it was expected to tick higher to 12.0%, but the euro bears will point to the softer Italian unemployment data as evidence that all is still not well in the Eurozone. Today focus will be given to Eurozone GDP and the US ADP payroll figure although neither of these are as significant as the ECB meeting or Friday’s non-farm payroll. The GDP data is due to come in at 0.3% and ahead of this we already see EURUSD pushing to a one week high at 1.3820.
But it’s the strength in USDJPY that’s been catching many people’s attention. Not far off knocking on the door of 104.00 this morning having marked a new two month high yesterday the dollar bulls will be hoping for a push to test the 105.00 area not seen since the very end of last year. A stronger than expected ADP payroll today (consensus is for 195k to print on the screens) could keep the dollar supported pushing the Yen lower, but as mentioned it’s the non-farm payroll this Friday that’s more likely to act as any trigger in keeping USDJPY’s momentum going.