Euro extends losses after soft PMIs release

3 nhiều tuần trước kia 8
)

Posted 46 minutes ago Share Print

The euro has edged lower on Friday. EUR/USD is trading at 1.0687 in the European session, down 0.14% on the day.

Is the eurozone economy slowing down?

The week ended on a sour note in Europe as June PMIs declined in the eurozone. The Services PMI dropped to 52.6, down from 53.2 in May and below the market estimate of 53.5. The Manufacturing PMI eased to 45.6, down from 47.3 in May and shy of the market estimate of 47.9. The manufacturing sector remains in a prolonged depression and hasn’t recorded growth (a reading above 50.0) since June 2022. Germany and France, the two largest economies in the eurozone, also posted weaker services and manufacturing PMIs in June.

The weak PMI data could point to slow growth in the second quarter. Still, this is just one report and the European Central Bank will be looking at further data before deciding if another rate cut is appropriate. The ECB cut rates earlier this month, the first cut since it embarked on a rate-tightening cycle to curb inflation.

Inflation has proven to be stubborn as the ECB tries to bring it back down to the 2% target. The May CPI report was disappointing, as headline CPI rose in May from 2.4% to 2.6% and core inflation climbed to 2.9%, up from 2.7% in April. The ECB has shown that it is willing to lower rates even if inflation is above the 2% level but it is unlikely to cut again before inflation moves lower.

Another headache for the ECB and the euro is the uncertainly over the elections in France, which take place on June 30th and July 7th. Stock markets in France have already suffered a sell-off and that could be repeated if the extreme-right makes gains, as it did in the recent European Parliament elections.
.
EUR/USD Technical

  • EUR/USD tested resistance at 1.0719 earlier. Above, there is resistance at 1.0735
  • 1.0686 and 1.0670 are providing support

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at [email protected]. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including Investing.com, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.

Kenny Fisher

Kenny Fisher

Đọc toàn bộ bài viết
@2024