A solid services purchasing managers index (PMI) from Spain was offset by soft figures from France, and EUR/USD is now trading at $1.3597, up just 0.07%. Spain posted a services PMI reading of 54.2 for December, whereas analysts were expecting a level of only 51.5, and this was the highest reading since 2007. On the other hand, France revealed a figure of just 47.8, which indicates contraction territory.
This comes after French manufacturing PMI dropped to a seven-month low last week. France is the second-largest economy in the eurozone, but traders are worried the cracks are beginning to show.
At 3pm (London time), the US will announce the non-manufacturing PMI and factory orders reports. The Federal Reserve is already reducing the size of its monthly stimulus package, and if these reports come in above expectations we could see traders sell the euro and buy the US dollar.
Tonight, the Federal Reserve will nominate its next chairperson. Janet Yellen virtually has the job, so the nomination is effectively a formality. We are likely to see low volumes ahead of the 10.30pm (London time) announcement.