Euro is subdued
The euro is trading at $1.2751. It is just off a two-year low and is showing no signs of recovering this morning. Germany consumer climate figures dropped in September to 8.3 from 8.6 in August, further proof that the strongest economy in the currency area is suffering. We are not expecting any major economic announcements from the eurozone today. Traders will be focused on the final reading of US GDP at 1.30pm (London time). The consensus is for a reading of 4.6%. Keep in mind however, that we have been surprised by US growth in the past even when other indicators appeared to be robust.
The euro is encountering resistance at $1.2811. Strong growth numbers from the US could ramp up speculation about interest rates rising sooner than expected, which may drive the euro below the $1.27 mark.