The dollar continued to gain ground against all the major currencies in today’s Asian and European trade in the wake of the surprisingly hawkish Fed minutes which suggested that the FOMC may curtail its QE program by the end of 2013. The euro however managed to survive several assaults on the the key 1.3000 level after PMI data from the region and German retail sales showed some stabilization and improvement.

EU Final services PMI data printed at 47.8 versus 47.8 last but both Italian and Spanish services PMI reading improved to 44.3 from 42.7 and 45.6 to 45.1. Although the data remains well below the 50 boom/bust line, the latest readings from the region were second best monthly results in more than a year indicating that the service sector in the periphery economies is stabilizing and may be starting to recover.

Meanwhile German Retail sales beat expectations rising by 1.2% versus 0.9% eyed. This was the second highest rise in more than a year and a good sign that the German consumer remains relatively confident about the economic conditions at home. Overall German retail sales fell in 2012 by approximately 0.1%-0.3% according to the statistics office.

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