EUR/USD (a 4-hour chart)
The ISM manufacturing report in the U.S. was unexpectedly weak – that activity fell to the lowest level since last June. The index fell sharply in January by 5.2 points to 51,3 p. down from a revised 56.5 p. in December, whereas the slight decrease to 56 p. was expected. A month ago the same index for the services sector decreased to a half-year minimum.
The Euro strengthened after two days of decline amid the manufacturing activity growth in the Euro area, which continues to be on the maximum levels since May 2011.
The final index of business activity in the manufacturing sector in the Euro zone increased in January to 54 p. from 52.7 p. in December, and was slightly better than the original estimates at the level of 53.9 p. Activity in the manufacturing sector grew in January in all major countries except Italy; in Germany it reached the 32-month maximum.
The pound, on the contrary, showed a significant decline, to six-month minimums versus the dollar after the release of the same report from the Markit. The index of business activity in the manufacturing sector in the UK declined in January to the 3-month minimum 56.7 p. from 57.2 p. in December.
The yen grew to almost 2.5-month maximums versus the dollar amid a continued fall in stock markets. Futures on the Nikkei decreased again on Monday by more than 3%, after such a fall on Friday.