The euro and pound started the week trading without an obvious direction against the US dollar, as the Euro snapped back versus the commodity dollars (AUD, NZD, CAD) which were under pressure in early trade on Monday.

Since 9.30am Tuesday the Euro and Pound have both made sharp moves upward from their undecided bases. With EURUSD pushing up towards 1.2900, the level it closed under during the 2nd half of last week.

Stabilizing the EURUSD allows the establishment of a technical base before publication of PMIs in the Eurozone this morning. Traders expect a slowdown in European manufacturing activity in September with a further contraction in the manufacturing sector in France.

A further slowdown in economic activity in the euro zone will confirm the dynamics in place since the beginning of the year, while the ECB eases monetary policy to support domestic demand and bank credit.

Yesterday the President of the ECB, Mario Draghi, spoke to the Committee on Economic and Monetary Affairs of the European Parliament and said that the central bank was ready to launch other unconventional tools to counter the risk of deflation in the eurozone.

The British Pound is still suffering a hangover from the Scottish indepenence vote last Thursday. Which went in favour of keeping the Union of the United Kingdom intact. Whilst some economists argue that this vote was already prices in to the currency, many are expecting a relief rally of sorts if upcoming data paints a rosier picture for the outlook of GBP.