EUR/USD has been on a consistent upward trend since early August, with only brief moments of stabilization, according to Commerzbank’s FX analyst Michael Pfister.
PMI Data Presents Challenges
“Yesterday, the pair reached a new yearly high, but this movement is almost entirely driven by USD weakness. The US Dollar continues to decline, while the Euro has remained largely stable since the start of August. This isn’t surprising, given that recent data from the Eurozone has mostly met expectations.”
“However, this might change with the release of today’s PMI figures. The reading was higher, primarily due to a surge in services activity in France, likely fueled by the excitement around the upcoming Olympic Games in Paris. In contrast, Germany’s PMIs came in negative, which could lead the market to anticipate more rate cuts, potentially bringing the EUR/USD rally to a halt for now.”