Euro Gains Stalled Temporarily
May 23, 2008
Adding to the difficulties the ECB now face with regards to monetary policy, the Eurozone purchasing managers index for services and manufacturing companies unexpectedly fell today. Both sectors are now marginally above the 50.0 measure which separates growth from contraction, above 50.0 suggesting growth and below suggesting contraction. This now raises concerns that the worse has yet to be seen, particularly in the face of a stronger Euro and a surging oil price. Following the data release the Euro’s gains were temporarily stalled, while the price of oil set a new record just above $135 a barrel.