Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
India Services Sector Rebounds in January as New Business Gains Momentum: HSBC PMI Shows Growth 
Asian Currencies Strengthen as Indian Rupee and Australian Dollar Rally 
Gold and Asian Stocks Rebound as Market Volatility Eases and Global Sentiment Improves 
Japan Declines Comment on BOJ’s Absence From Global Support Statement for Fed Chair Powell. Source: Asturio Cantabrio, CC BY-SA 4.0, via Wikimedia Commons 
Morgan Stanley Raises KOSPI Target to 5,200 on Strong Earnings and Reform Momentum 
Japan’s Agricultural, Forestry and Fishery Exports Hit Record High in 2025 Despite Tariffs 
China Holds Loan Prime Rates Steady in January as Market Expectations Align 
Gold, Silver, and Platinum Rally as Precious Metals Recover from Sharp Selloff 
China and Uruguay Strengthen Strategic Partnership Amid Shifting Global Order 
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence 
The eurozone final services and composite PMI data came below expectations. The final Markit Euro-zone PMI services sector index rose to a 70-month high of 56.0 in March, up from 55.5 in February but below the earlier flash estimate of 56.5. The composite index came in at 56.4 compared to a reading of 56.7 expected.
Breakdown showed that German services and composite PMIs came in close to expectations at 55.6 and 57.1, respectively, while French services and composite were softer than expected and came in at 57.5 and 56.8, respectively. Spain was close to expectations, while Italy was weaker than expected at 52.9 and 54.2, respectively.
The upturn in eurozone service sector output gathered momentum towards the close of Q1. Business optimism rose to a fresh series-record high, improving at service providers and remaining relatively elevated at manufacturers too. Price increases accelerated in Germany, Spain and Ireland. There were still price declines in France and Italy even though the pace of decline fell significantly.
The data overall will maintain expectations of strengthening growth conditions. However, there will also be further doubts whether the European Central Bank (ECB) will be confident enough to make any early move towards policy normalisation. At its March’s policy meeting, the ECB reiterated that a widespread rise in inflation is needed to be seen in order to trigger a tightening of monetary policy and the weak inflation pressures in both France and Italy will remain an important concern for the central bank.
“Price pressures remain elevated, and look likely to feed through to higher consumer prices in coming months, but it seems likely that the ECB will hold its accommodative policy stance until at least later this year. These survey numbers nevertheless shorten the odds of policy being tapered in early-2018,” said Chris Williamson, Chief Business Economist at IHS Markit.
In an interview published in a German national weekly newspaper, Die Zeit, Deutsche Bundesbank President Jens Weidmann was noted saying that the time to ease up on bond purchases is nearing and would welcome it if bond purchases are stopped within a year. Data for the second quarter will be closely watched given that the June ECB meeting could be a pivotal point for monetary policy.
EUR/USD was trading in a narrow range, at around 1.0677, at the time of writing. The pair has held strong trendline support at 1.0635 on Tuesday's trade. We find a hammer formation at Tuesday's lows. We see weakness on break below support at 1.0650. Downside till 1.0575 then looks likely.
FxWirePro's Hourly EUR Spot Index was at 44.0819 (Neutral), while Hourly USD Spot Index was at -30.4626 (Neutral) at 1215 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
