EUR/USD exchange rate weakens following disappointing Eurozone data
The euro US dollar (EUR/USD) exchange rate is stumbling this morning following the publication of the Eurozone’s latest PMI data.
At the time of writing, the EUR/USD exchange rate is trading at around €1.1110, down roughly 0.5% from this morning’s opening rate.
Euro (EUR) appeal sapped following domestic PMI reading
The euro (EUR) is facing renewed pressure this morning, and is slumping against most of its counterparts, following the release of the Eurozone’s latest S&P Global PMI data.
Both the preliminary manufacturing and services indices missed expectations for September, with the manufacturing index sinking deeper into contraction territory (a score below 50) while the services index narrowly remained in the expansion zone (a score above 50).
Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented:
‘The eurozone is heading towards stagnation. After the Olympic effect had temporarily boosted France, the eurozone heavyweight economy, the Composite PMI fell in September to the largest extent in 15 months. The index has now dipped below the expansionary threshold. Considering the rapid decline in new orders and the order backlog, it doesn’t take much imagination to foresee a further weakening of the economy.’
The disappointing PMI figures across the Eurozone have weighed heavily on the single currency this morning, reinforcing the current gloomy outlook on the Eurozone economy and sinking EUR exchange rates as a result.
US dollar (USD) wavers ahead of PMI data
The US dollar (USD) is trading in a wide range this morning, rising against several of its counterparts but muted elsewhere, as investors await the publication of the US’s preliminary S&P Global PMIs.
Scheduled for release this afternoon, the data release could infuse volatility into the ‘greenback’ in the second half of today’s European session.
The data is expected to report a mixed reading, with the manufacturing index set to deteriorate further into contraction territory while the services index is forecast to remain above 50, however, is also expected to show signs of slowing growth within the sector.
Should the data print as expected, USD exchange rates could dip moving into the second half of today’s European session.
EUR/USD forecast: Eurozone data to drive movement?
Looking ahead, the primary catalyst of movement for the euro US dollar exchange rate looking ahead to Tuesday will likely be the publication of Germany’s upcoming IFO business climate index.
The latest index is anticipated to signal another decline in September, following a six-month low in August.
Should the data confirm a further deterioration in business sentiment within the Eurozone’s largest economy, EUR exchange rates will likely remain on the back foot moving into tomorrow.
Turning to the US dollar, a lack of significant data releases may leave USD investors eyeing up some mid-tier data scheduled for release tomorrow afternoon.
Will the latest CB consumer sentiment index dip as forecast and weigh on USD exchange rates?