-Chris Williamson, an economist at Markit
It seems that on Thursday Mario Draghi will try to talk down the Euro by any means necessary, as the most traded currency pair is climbing to 1.40-mark once again. It is unlikely that any radical changes to the monetary policy will be made, as latest fundamentals are pointing at region's recovery, especially Tuesday's slew of the upbeat data.
On Tuesday EUR/USD soared to 1.3951 on the back of stronger-than-excepted data from the Markit. The composite index climbed to 54.0 in April from 53.1 a month earlier, while a gauge of activity in the services sector remained unchanged at 53.1. Last week's report showed that manufacturing PMI jumped to a three-month high of 53.4. At the same time, Spain's PMI services measure jumped to 56.5 compared with a level of 54.0 a month earlier. The improving trend was also noticed in Italy, where PMI moved back into expansion zone.
What is more important is the fact Europe's periphery is showing signs of improvement, while major countries like Germany are showing resilience. The promising figures could shed some light on the outcome of this week's ECB meeting. Earlier the CPI showed an improvement in April, though it was smaller-than-expected. Inflation advanced 0.7% last month, accelerating from a record-low 0.5% recorded in March.
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