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EUR/USD Through Post-ECB Lows as PMIs Flash Recession Warning

FOREX
  • After EUR/USD's flat finish on Thursday, the pair has slipped through the overnight lows to touch 1.0130 on the back of a series of particularly poor PMI numbers from across Germany and France. This tipped the Eurozone-wide flash composite PMI below 50 for the first time since the lockdown-induced slowdown in early 2021.
  • Despite this, ECB speakers continue to talk up the prospect of rate hikes across H2, with Kazimir this morning going through the likelihood of a further 25 or 50bps rate rise in September - the first in a series of "similar steps".
  • With the EUR weaker across the board, the greenback is the main beneficiary, putting the USD Index back above the 107 level but still comfortably off the Monday highs of 108.036.
  • Having sold off alongside the EUR this morning, GBP saw some reprieve on a better set of manufacturing, services PMIs, which seemed to counter the mixed messages in the morning's retail sales report. EUR/GBP is through the Thursday low and narrowing the gap with Monday's 0.8458.
  • Focus going forward turns to the prelim US PMI data that's still expected to slow a modest rise is activity, as well as Canadian retail sales for May.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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