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Forex Flash: Eurozone economy continues to show signs of weakness - BTMU

FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that ECB Vice President Constancio stated yesterday that “the economy continued to give signs of weakness” while also emphasising the importance of the recent “significant” fall in inflation adding that a new rate cut was “always a possibility”.

He adds that the building expectations of further ECB easing are weighing upon the euro in the near-term although the sharp decline in Italian and Spanish government bond yields yesterday following the re-appointment of Italian President Napolitano are providing offsetting euro support. He writes, “President Napolitano now hopes to reach an agreement to form a government within days fostering support from both the left and right. Elsewhere the Norwegian krone’s under performance in 2013 extended further yesterday following comments from Norges Bank Governor Olsson stating that inflation was worryingly low.”

Forex: NZD/USD testing the 0.8400 level

The NZD/USD took quite the tumble Tuesday morning during European trading, plummeting to the 0.8360 level (session low), before the recovery rally took place. Having pared some of its losses, the cross has now moved within range of the 0.8400 level and is testing this barrier in these moments. Despite the recovery however, the pair is still incurring a loss of -0.30% off its opening.
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European markets up despite PMI in Germany and China, Apple earnings on the way

The German DAX 30 (+0.58%), the French CAC 40 (+1.61%), the Italian FTSE MIB (+0.97%), the Spanish IBEX 35 (+1.45%) and the British FTSE 100 (+0.92%) are edging higher on Tuesday despite the upsetting result of German flash PMI in April. The preliminary release of April German manufacturing PMI was expected to stay unchanged at 49.0 but dropped to 47.9 and services PMI eased from 50.9 to 49.2, instead of the slight rise to 51.0 as expected. French Services PMI rose from 41.3 to 44.1, beating the 42.0 expectations, while the manufacturing figure rose from 44.0 to 44.4, above 44.3 consensus.
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