The eurozone continues to show weak data readings, and many expect the recession in the eurozone to last through the rest of the year. However, even so, the euro is still gaining against the US dollar. Even with the current “risk off” environment, euro is heading higher.
The latest Purchasing Managers’ Composite index reading from Markit shows that a rise from 46.9 to 47.7 is being seen for May. However, even though there is a rise, the index is still solidly in contraction mode. The eurozone is considered to be in contraction until it reaches the 50.0 level.
Germany appears to be stagnating, and France continues to struggle.
Even with this news, the euro is gaining against the US dollar today. Some think that it might be more of an indication of dollar weakness than of euro strength. However, if the ECB decides to make more drastic moves to boost the eurozone economy, things could change and the euro could weaken.
For now, though, euro is higher, even though there is a bit of a “risk off” feeling today with stocks lower and other risk assets out of favor.
At 14:37 GMT EUR/USD is up to 1.2908 from the open at 1.2858. EUR/GBP is up to 0.8562 from the open at 0.8544. EUR/JPY is down to 131.1860 from the open at 132.6450.
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