The euro today headed lower against the US dollar in the early European session following the release of mixed Eurozone PMI data by IHS Markit. The euro’s decline drove the EUR/USD currency pair lower as the US dollar recovered from its slump that occurred in the Asian session.
The EUR/USD currency pair today declined from a high of 1.1681 to a low of 1.1629 driven by the US dollar’s rebound.
The currency pair today headed lower despite the release of positive Markit Germany Services PMI, which came in at 54.5 beating the consensus estimate of 53.9. The Markit Eurozone Services PMI also came in above expectations at 55.2 versus the expected 55.0 print. The Markit France Services PMI missed expectations as it was recorded at 55.9 as compared to the expected 56.4. The Markit Italy Services PMI beat expectations by a significant margin by coming in at 54.3 versus the expected 53.3. The mostly positive PMI releases from across the Eurozone could not reverse the pair’s decline.
The currency pair’s decline was largely attributed to the greenback’s rebound as tracked by the US Dollar Index, which hit a high of 94.71 today, despite the closure of US markets due to Independence Day celebrations. The fundamental driver behind the pair’s decline seems to be the monetary policy divergence between the ECB and the US Federal Reserve.
The currency pair’s future performance is likely to be affected by tomorrow’s German factory orders, German construction PMI, US ADP employment report, and FOMC minutes.
The EUR/USD currency pair was trading at 1.1639 as at 13:49 GMT having dropped from an initial high of 1.1681. The EUR/JPY currency pair was trading at 128.63 having declined from a high of 128.95.
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