EURUSD has experienced another set-back today as Eurozone Q4 GDP was unexpectedly revised down to 0.0% QoQ from its already subdued 0.1% previous reading, and adding to the disappointment, February PPI figures also undershot forecasts at 0.1% MoM, -0.5% YoY compared to expectations of 0.2% MoM, -0.4% YoY. If anything, it is remarkable that the sell-off for EURUSD has not been more severe; as the bearish momentum could only push us back down as far as 1.3326 before suspected profit-taking pared back some of those losses to 1.3355 levels by the time of the US equity market open. As some solace, the morning's PMI data was better than expected with the Services component hitting 54.1 (53.7 expected, 53.7 prior), and the Composite reading coming out at 55.9 (55.5 expected, 55.5 prior). In the broader picture, these data points are unlikely to have a significant impact on tomorrow's ECB meeting where analysts are in unanimous agreement that the ECB will keep interest rates at 1.00% this month. Furthermore, officials are likely to repeat verbatim the language of previous statements that current monetary policy remains "appropriate". Trichet has already primed the market that he will reveal new lending rules this time around – a necessary step to ensure Greek debt does not fall outside the ECB's accepted collateral list, however with the political situation still somewhat fragile, it is likely Trichet will avoid wading into any controversial statements about the Greece bailout plans. Across the channel, UK PMI Services was a little below expectations at 56.5 (58.0 expected, 58.4 prior), a catalyst for GBPUSD also trading heavily during the morning session to lows of 1.5139. Like the Eurozone, there is also an interest rate decision due tomorrow as the MPC convenes for its last monetary policy meeting before the UK general election. It is not expected that any changes will be made to either the level of interest rates (which currently stand at ultra low 0.50% [...]
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