FXStreet reported that ING sees the euro’s near-term gains capped against the dollar; separate October data showed slower euro-area growth and renewed contraction in French business activity.
FXStreet attributed the currency view to Chris Turner, ING Global Head of Markets and Regional Head of Research for UK & CEE. Turner put the cap zone at 1.1250 to 1.1270 and said support at 1.1180 could be vulnerable during the week of Oct. 26.
The levels were part of Turner’s outlook, rather than a live spot quote. FXStreet said he cited high energy prices and French fiscal concerns, with a 1% to 2% risk premium possibly remaining in the euro. The outlet also reported his reference to a recent 10-basis-point narrowing in two-year EUR/USD swap differentials.
S&P Global’s flash Eurozone PMI Output Index eased to 51.9 in October from 53.1 in September, remaining above 50, the threshold separating expansion from contraction. S&P said the flash reading reflected responses equal to about 85% of its usual sample. Its GDP indicator implied a 0.3% quarterly pace, versus the 0.4% pace signaled a month earlier.
France’s business activity returned to contraction, S&P Global said. Reuters reported that the S&P Global flash composite PMI for France was 48.4 in October, down from 51.1 in September and below the 50 threshold. S&P linked higher euro-area manufacturing input costs partly to rising oil prices and said strikes, protests and political instability accompanied France’s downturn. The company also referenced the eurozone debt crisis and an earlier European Central Bank (ECB) pledge in discussing weak French business confidence.
France’s Ministry of Economy and Finance said Oct. 23 that Moody’s maintained the country’s Aa3 sovereign rating with a negative outlook. EconoTimes previously covered French fiscal pressure after the country’s 10-year yield briefly topped 5%. The ministry said France should adopt a 2027 budget by year-end to reduce the deficit to 5%.
