EUR/USD rallies despite Eurozone PMI weakness

FXStreet (London) - EUR/USD has rallied through the morning session after further weak Eurozone data prompted euro bears to book profits.

Disappointing Eurozone PMI numbers

Eurozone composite Purchasing Managers Index data released by Markit showed that growth in the currency bloc fell to 52.3 in September, down from 52.5 in August and a nine-month low.

The biggest decline came from services, which fell 0.3 points to 52.8. In addition, manufacturing was his by waning export demand, falling from 50.7 to 50.5, hovering close to contraction.

France continues to be cause for concern, with composite PMIs falling back into contraction, dipping to 49.4 from 50.3 in August.

Draghi remains committed to TLTROs

With such weak European macro data, markets would usually be quick to speculate over the possibility of unconventional monetary policy measures (quantitative easing-type programmes). However, European Central Bank president Mario Draghi has already voiced that he remains wed to the central bank’s targeted long-term repayment operations (TLTRO) and that despite last week’s disappointing take-up, he will wait until the outcome of December’s operation before announcing any further measures.

EUR/USD is currently trading at USD1.2888, up 0.32 percent on the session after opening at USD1.2846.