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There was no love for the euro and Swiss franc this week, likely due to weak economic updates from Europe and a rebound in the Greenback.

The Euro

Overlay of EUR Pairs: 1-Hour Forex Chart
Overlay of EUR Pairs: 1-Hour Forex Chart
EUR Weekly Performance from MarketMilk
EUR Weekly Performance from MarketMilk

European Headlines and Economic data


Final read on Eurozone manufacturing PMI for January settles at 54.8 vs. 55.2 in December

Upturn in German manufacturing continues in January, despite growing risks from supply chain disruption – At 57.1 in January, the headline IHS Markit/BME Germany
Manufacturing PMI remained firmly inside growth territory, albeit down from December’s near three-year high (58.3) and the lowest for four months.

French Business conditions improve at quickest rate for six months

“The seasonally adjusted IHS Markit France Manufacturing Purchasing Managers’ Index posted 51.6 in January, up from 51.1 in December”

“The improvement in business conditions was partially driven by a return to growth in new orders during January. The result marked the first increase in sales since October.”

Spain’s operating conditions deteriorate in January – “Storm Filomena and increasing delays in the delivery of inputs all hampered production and market activity. Job shedding subsequently intensified, although confidence about the future was little changed on December’s near two-and-a-half year high. “

Italian Manufacturing recovery strengthens in January  – “Italy’s manufacturing recovery continued into 2021, according to the latest PMI data, with conditions improving at the sharpest rate since March 2018. Output growth was the fastest for three months, while the upturn in inflows of new work quickened to a solid pace.”

December 2020 Euro area unemployment at 8.3%; EU at 7.5%


In January 2021, French consumer prices increased by 0.6% year on year

Spanish unemployment increased by 76K in January, a lower increase than the same month in 2020

Flash estimate for Q4 2020 GDP: down by 0.7% in the euro area & by 0.5% in the EU

“According to a first estimation of annual growth for 2020, based on seasonally and calendar adjusted quarterly data, GDP fell by 6.8% in the euro area and 6.4% in the EU.”

Italian GDP decreased by -2% q/q & by -6.6% over the same quarter of previous year.


Flash estimate – January 2021 Euro area annual inflation up to 0.9% – All sectors were higher with exception of energy, which was down -4.1% in January vs. -6.9% in December

December 2020 Industrial producer prices up by 0.8% m/m in the euro area; Up by 0.9% m/m in the EU – “The annual average industrial producer prices for the year 2020, compared with 2019, decreased by 2.6% in the euro
area and by 2.4% in the EU”

Service sector leads further contraction of eurozone economy – IHS Markit – “Services was once again the main drag on the economy, with activity in this sector contracting for a fifth successive month and also at a sharper rate
than in December. Manufacturing remained a bright
spot, with production rising for a seventh successive
month albeit at the lowest rate in this growth

French service sector activity contracts at a quicker pace in January

Downturn in German services activity continues in January amid tighter lockdown measures


German constructors endure difficult start to 2021

Eurozone construction activity contracts at steepest rate since May 2020

The IHS Markit Eurozone Construction Total Activity Index fell from 45.5 in December to 44.1 in January

Commercial building activity fell for the eleventh successive month in January, and at the sharpest rate since last May.

The decline in construction output across the eurozone was driven by falls in each of the three largest economies in the region.

In December 2020, volume of retail trade up by 2.0% m/m in euro area; Up by 1.4% m/m in EU


In December 2020 estimates for seasonally adjusted index of retail trade increased by 2.5% in the month on month series, both in value and volume terms.

German manufacturing new orders were down 1.9% m/m in December – “Domestic orders decreased by 0.9% and foreign orders decreased by 2.6% in December 2020 on the previous month. New orders from the euro area went down 7.5%, and new orders from other countries increased by 0.5% compared with November 2020.”

In 2020, French exports will contract (down 15.9%, after 3.5% growth in 2019)

In Q4 2020, French payroll employment dropped by 0.2% – “Over the year as a whole in 2020, it declined by 1.8% (that is -360,500 jobs), after five years of successive increases.”

Dollar set for best week in three months as pandemic recoveries diverge 

The Swiss Franc

Overlay of CHF Pairs: 1-Hour Forex Chart
Overlay of CHF Pairs: 1-Hour Forex Chart
CHF Weekly Performance from MarketMilk
CHF Weekly Performance from MarketMilk

Swiss Headlines and Economic data


U.S. Censure Won’t Stop SNB FX Interventions, Central Bank Chief Says – “Switzerland really isn’t a manipulator,” Jordan told SRF’s ECO program. “We have to find a way to create favorable monetary conditions so that the Swiss economy can develop and doesn’t sink into deflation. At the moment these foreign exchange interventions are very important.”

Despite on and off closures of Swiss retailers last year, total 2020 retail sales figures rose by 0.1% compared to 2019.

Swiss Industry defies the second corona wave – In January 2021, the Purchasing Managers ’Index (PMI) at 59.4 points and thus 2.1 points higher listed as in December 2020


SECO Consumer sentiment falls in January to -15 VS. -13 in October – “Figures for January show that the sentiment remains gloomy among Swiss households. Their expectations have taken a particular downturn when compared to October. All sub-indices are still well below their long-term average.”