Key Manufacturing Sector Improves in Germany and Eurozone

 As the new year begins, economic data remains sparse but the few releases highlight the difficulties being faced in the Eurozone. Markit Economics earlier reported that Germany’s Purchasing Manager Index for the manufacturing sector rose to 48.4 in December. The consensus of analysts had predicted a rise in the reading to only 48.1, up from November’s 47.9 reading. The broader European Monetary Union’s PMI manufacturing reading was also released, with the December reading coming in at 46.9, in line with the consensus call and an improvement from the 46.4 reading in November. For reference, any reading below 50.0 is indicative of a contraction in the sector.

Yesterday marked the 10-year anniversary of the common currency Euro, but instead of champagne and celebration, the bloc’s leadership took the opportunity to caution investors and their respective constituencies that 2012 will hold still more challenges. Throughout the Eurozone, political leaders such as Germany’s Angela Merkel and Italy’s Giorgio Napolitano took to the airwaves to call for continued strength and resolve, so that the debt crisis can soon be put behind them.

With rare exception, economists’ and analysts’ predictions mirror the leadership’s warnings, with many forecasting that at least a few of the more fiscally troubled nations will be compelled to leave the Eurozone this year.

On the eToro trading platform, sentiment among the majority of traders of the EUR/USD pair, recently lower at 1.2950, is predominantly bullish. Among the OpenBook gurus, traderpyruss has recently opened several short positions in the pair, while trader babczyk remains more bullish, opening a long position in the pair earlier today to add to the open long trades placed over the weekend.