EUR/USD has started the new trading week with losses, as the pair trades just above the 1.13 line in Monday’s European session. It’s a quiet day on the release front, with only two events on the calendar. German Ifo Business Climate was almost unchanged at 106.7 points, but this was below the estimate of 107.4 points. In the US, today’s sole event is Existing Home Sales, with an estimate of 5.03 million.
Eurozone manufacturing numbers were a disappointment on Friday, as French and German manufacturing PMIs fell short of their estimates. French Flash Manufacturing PMI slipped to 47.7 points, short of the forecast of 49.7 points. The index has been below the 50-point level since April, pointing to ongoing contraction. The German PMI was almost unchanged at 50.0 points, but this was shy of the estimate of 51.8 points.
The Greek saga continues, as Greece and its creditors try to find some common ground on a bailout extension. Greece was granted a four-month extension on Friday, provided that the country could provide a list of “reform commitments” showing that Greece would continue to reform its economy. Greece’s creditors will review the proposals on Tuesday before giving their approval to the extension. Even if this occurs, the extension is a stop-gap measure and the bailout crisis is far from over.
Last week, the ECB took a major step aimed at improving transparency, as the central bank published a summary of its January policy meeting, the first time the Bank has done so. At the January meeting, the ECB decided that it would implement a massive QE program in March, with purchases of EUR 60 billion each month. The summary did not contain any surprises, but did note that ECB policymakers had discussed a EUR 50 billion QE scheme before deciding to set the amount at EUR 60 billion each month. The summary release puts the ECB more in line with major central banks such as the Federal Reserve and BOJ, which publish minutes of each policy meeting.
EUR/USD 1.1310 H: 1.1394 L: 1.1296
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