Disappointing day for euro as data overshadowed by US interest rate decision due today

The euro had a disappointing day despite ZEW German business confidence data coming out better than expected. It had been forecast to drop this month – it was reported at 55, much improved from last month’s figure of 54.4. However, this was overshadowed as the two day US Federal Reserve meeting had already started to have an impact on the single currency, especially as the euro-US dollar pairing is the most traded one in the world.
Today flash Purchasing Managers’ Index (PMI) data from the Eurozone is out this morning, which is expected to drop off slightly from last month, from 54.4 to 54.2. Most of the movement today will be related to sentiment surrounding the US Federal Reserve meeting, which should have a big impact on the single currency.

There is also Eurozone inflation data in the form of the Consumer Price Index out at 10am, which is expected to fall to a negative figure again, from 0.1% to -0.2%. Should it manage to keep its head above 0%, we could see some support for the euro.