Positive Euro Data No Help to EUR/USD

French Manufacturing data defied expectations rising to a 40 month high of 56.3 from 54.9 the month prior with output index reaching 60.1 while exports hit a 39 month high of 58.4. German PMI data was also better than expected rising to 59.6 from 56.9 while the PMI Services component climbed to 54.7 from 52.2 eyed.

The news provided a modicum of support for the beleaguered EUR/USD which hit a fresh yearly lows of 1.3406 in late Asian trade on concerns that Germany will refuse to provide a bailout package for Greece at this Thursday’s EU summit. The pair bounced to 1.3440 ahead of the key IFO business sentiment survey due at 10:00 GMT. But the gains quickly evaporated when the German finance minister stated that Germany will not participate in in any loan that EU might raise to help Greece.

Still, the decline in the euro exchange rate has been the one silver lining for the export centric Eurozone helping to spur growth in the region. If today’s IFO report beats forecast of a 95.8 print it could trigger a short covering rally as the positive economic data could offset some of the negative sentiment swirling about the currency.