The PMI data in Germany and in the Eurozone did improve but the improvements were pretty modest underlining the still weak with the Eurozone readings for manufacturing and services well below UK levels and still in contraction territory.

The news from Germany that it plans to suspend its constitutional debt brake for a fourth consecutive year underlines the lack of fiscal space Germany will have going forward and reinforces the downside risks to growth.

We have been keen to stress that while the window for Dollar appreciation back to the highs set in October and/or beyond may now have closed, the growth outlook in the Eurozone does not point to much upside scope for EUR/USD either.