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Euro Exhibited Gains on Strong Domestic Data on December 1

David Meyer

Key Global Foreign Exchange Indicators on December 1

(Continued from Prior Part)

Euro gained after four days of losses

The euro-to-US-dollar pair rose by 0.6% on December 1, 2015. The currency pair touched a high of 1.0637 after the US ISM manufacturing data was released, which we discussed in Part 1 of this series. The currency pair ended at 1.0632.

This week is crucial for the currency pair, with the European Central Bank monetary policy meeting scheduled for December 3, 2015.

Surprisingly strong domestic data

The flurry of positive numbers from the Eurozone started with the Spanish Manufacturing PMI, which came out at 53.1 against a forecast of 51.9. This was followed by the Italian Manufacturing PMI of 54.9, which was above the consensus of 54.2. The German Manufacturing PMI also beat forecasts at 52.9, and the French PMI was slightly below the forecasts at 50.6.

There was more positive data from Germany in terms of labor data, as the German unemployment rate fell to a record low. Plus, the number of unemployed people fell by 16,000 from October to November.

Impact on the market

Looking at the performance of currency-based ETFs linked to the euro on December 1, 2015, the ProShares UltraShort Euro ETF (EUO) ended the day 1.2% lower. EUO is inversely linked to the euro. In contrast, the Guggenheim Currency Shares Euro ETF (FXE) has a direct relation to the euro. FXE rose by 0.65% on the back of the strong PMI release.

In terms of German ADRs (American depositary receipts) trading on US exchanges, SAP AG (SAP) was trading with a positive bias and rose by 0.91%. Deutsche Bank (DB) also rose by 1.9% while the Belgian beverage maker Anheuser-Busch Inbev (BUD) saw a slight rise of 0.12%.

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