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Euro Bounced Back after Falling to a 7-Month Low

David Meyer

Euro Rebounded, Singapore Dollar Fell, and Israeli Shekel Rose

Euro fell to a seven-month low in early trade

The euro-US dollar currency pair fell to a low of 1.059 on November 23, 2015, before rising towards the end of the day to close at 1.064. The euro fell early despite the Eurozone’s PMI (purchasing manager’s index) coming in above the forecasts. Later in the day, the US housing numbers were negative. This put pressure on the US dollar. The Fed’s met on Monday to discuss the discount rate. This was another major event that impacted the currency pair.

Positive domestic data and the Fed’s announcement

Markit released its PMI for November on November 23, 2015. The data were mostly positive. The Eurozone manufacturing and services PMI came in at 52.8 and 54.6, respectively. This was above the previous month’s figures. The rise was primarily due to the rise in the German manufacturing and service PMI. They rose to 52.6 and 55.6, respectively. The services PMI for France fell slightly to 51.3. The Fed called for a meeting on Monday to discuss the discount rate. This accounted for the initial rise in the US dollar against the euro. However, the lack of any major positive statements from the Fed resulted in a rebound for the euro-US dollar pair.

Impact on the market

Looking at the performance of currency-based ETFs linked to the euro on November 23, 2015, the ProShares UltraShort Euro ETF (EUO) ended the day higher by 0.34%. EUO is linked to the euro. In contrast, the Guggenheim Currency Shares Euro ETF (FXE) has a direct relation to the euro. It fell by 0.15% on Monday.

Regarding German ADRs (American depositary receipts) trading on US exchanges, SAP AG (SAP) fell by 0.84% while Deutsche Bank (DB) fell by 1.7%. The Belgian beverage maker Anheuser-Busch Inbev (BUD) rose by 0.51%.

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