Euro Rate Today: Outlook for the EUR boosted by better-than-expected PMI data and retail sales data

Modified: Thursday, 03 October 2013 12:23 BST

Eurozone Service PMI figures have boosted the euro so far this morning. US data today will need to really impress to see the rate fall. We expect rates to remain above 1.3575 during trading today.

The euro dollar exchange rate is 0.17 pct up on last night's closing rate at 1.3602.
The euro pound exchange rate is 0.27 pct higher at 0.8393.
The euro Australian dollar exchange rate is 0.17 pct higher at 1.4500.

(About the above quotes: All quotes here are wholesale figures. Your bank will subtract a discretionary spread to derive profit when delivering or transferring your money. However, an independent FX prover will beat your bank's quote and look to deliver up to 5% more currency. Find out more here).

Euro held aloft by services PMI

The positive tone in euro trading was further underpinned today by the release of broadly positive PMI data releases out of the Eurozone.

Eurozone Markit Services PMI read at 52.2, ahead of forecasts for 52.1.

Composite PMI data for the Eurozone for September also read at 52.2, ahead of expectations at 52.1 and better than last month's 51.5.

Germany disappointed a little with a reading of 53.7 being released, analysts had hoped for 54.4. Still, it was an improvement on last month's 52.8.

Outlook for the euro turns more positive

Euro rates are predicted to remain supported by Geoffrey Yu at UBS who saw positives in yesterday's ECB press conference:

"ECB President Draghi frustrated euro bears on Wednesday by refusing to dwell too much on the issue of shrinking excess liquidity. Denying even that there was even an actionable link with front-end rates (and implicit tightening), the prospect of continued liquidity withdrawal, at least in the short term, will remain a barrier against euro downside."

According to Ipek Ozkardeskaya at Swissquote Bank year highs for the euro vs the dollar now beckon:

"EURUSD spiked to 1.3607 for the first time since February and extended gains to 1.3623 in Asia. Traders are now looking to at 1.3711 – year high on US budget deadlock and expectations on delayed Fed tapering. Any pullback should offer a dip buying opportunity in EURUSD."