EUR/USD opened at what would be its intraday high at 1.3380 and fell down to its closing price of 1.3220 faster than you can say, “I want an Android for Christmas!” Against the yen, the shared currency sustained a 61-pip loss with EUR/JPY ending the day at 111.41.
It seems like credit rating agencies are working extra hard to send the euro into the bear lair for Christmas. Yesterday I talked about S&P downgrading its outlook on the Belgian economy. Today, I’m telling you that Moody’s put Spain’s Aa1 credit rating on review.
A few market junkies say that although a Spanish downgrade wouldn’t be that much of a surprise since that would only bring Moody’s rating at par with S&P’s levels, the eagerness of these agencies are giving euro investors goosebumps.
Making yesterday’s trading even worse for the euro was Portugal’s bond auction. The government sold 500 million EUR worth of three-month Portuguese bonds with a yield of 3.4%, which was nearly twice what it paid for in November at 1.82%. Consequently, this implies that investors aren’t confident in buying Portuguese debt.
See how Spain will fare in its own bond auction today as it aims to raise 3 billion EUR of 10-year and 15-year bonds. Also, make sure you also keep tabs on the events we have on our economic calendar to help you with your euro trades.
We start at 8:00 am GMT with the French services and manufacturing PMIs for December. The indices are expected to come in at 55.4 and 57.8, respectively.
Germany will also release its own version of the reports at 8:30 am GMT. Its services PMI seen to clock in at 59.0 after printing at 59.2 in November, while its manufacturing PMI is anticipated to be a tad higher at 58.2 than its previous reading.
Then we’ll get dibs on how the two sectors are doing in the overall region at 9:00 am GMT. The consensus for euro zone’s services PMI is for a modest decrease to 55.2 from November’s 55.4 figure. Its manufacturing PMI is also seen to be lower at 55.2 compared to its previous 55.3 reading.
After all that, we’re in for a treat with the region’s inflation figures. The CPI report for November is anticipated to show that consumer prices were 1.9% higher than they were a year before. On a monthly basis, the headline figure is projected to print a 0.1% uptick. Lastly, the core reading which excludes volatile items is seen to print at 1.1% year-on-year.
Whew! It looks like we’re in for an action-packed day, huh? Make sure you’re ready to catch 'em pips!