DislikedMelvin, there is too much going on for the PMI data to have a huge effect. Think bigger, what's hitting the headlines?
Bernanke came out yesterday more hawkish that expected. He did not signal a QE3. Since quantitative easing devalues currency it only makes sense for dollar strength.
A lot of money is long Euro and other currencies that needs to adjust, since they can't dump it all due to liquidity your seeing a nice sustained rally in the dollar. Check it out, its not just the Euro going down. It's all the majors. It's definitely a dollar...Ignored
Yes it was a clear dollar strength move thats why I questioned the legitimacy of the whole host of reasons provided by various news feeds which were Euro specific about the down move of the Euro. They would arguably have contributed to a certain extent though.
However, having said that, I don't think the FOMC statement was the real trigger behind such a move. Everyone already expected an end to QE2 with no/very low expectation of QE3. So not much hawkishness in that aspect. In fact if anything, he came out more dovish with the weaker GDP and unemployment forecast.
Of course we can then move on to say that this caused a 'risk-off' mode in the markets. But can this 'usual excuse' used to explain currency fluctuations really drive the Euro down to its current levels? I highly doubt so.