Euro edges lower on mixed eurozone PMI

August 22, 2024 Share Print 0

The euro is steady on Thursday. In the European session, EUR/USD is trading at 1.1136 at the time of writing, down 0.11% on the day.

Eurozone services accelerates, manufacturing dips down

There was mixed news from the eurozone PMIs, which provide a monthly report card for the services and manufacturing sectors. The services PMI climbed to 53.3 in August, up from 51.9 and above the market estimate of 51.9. This was the highest level of expansion since April and was largely boosted by the Olympic Games in Paris which took place in August. Notably, inflation fell to its lowest level since April 2021.

Manufacturing remained mired in contraction and dipped to 45.6, down from 45.8 in July and shy of the market estimate of 45.8. This was an eight-month low. Manufacturing hasn’t posted a month of growth in over two years and a weak global market means demand isn’t likely to improve anytime soon.
Germany, the largest economy in the eurozone, continues to struggle. The services PMI dropped to 51.4 in August, down from 52.5 in July and below the market estimate of 52.3. This was the weakest pace of expansion since March and services have weakened for the third straight month.

The Fed has signaled that a milestone interest rate cut is coming next month, likely as a quarter-point reduction. The Fed minutes on Wednesday noted concern over the deterioration in the labor market and most FOMC members at the meeting viewed a September rate cut as appropriate. Federal Chair Jerome Powell will address the Jackson Hole Symposium on Friday and the markets will be all ears.
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EUR/USD Technical

EUR/USD is testing support at 1.1141. Below, there is support at 1.1108
1.1183 and 1.1216 are the next resistance lines

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Kenny Fisher

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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.