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Euro Drops to New YTD Lows on Disappointing Eurozone PMIs

May 23, 2018 at 11:15 by Simon Mugo

Stacks of shiney euro coins plus some notesThe euro today hit new 2018 lows against the US dollar following the release of disappointing advance PMI data from across the Eurozone. Some of the PMIs released by IHS Markit included the Markit/BME Germany Manufacturing PMI, which missed expectations by a significant margin.

The EUR/USD currency pair today lost over 88 points to decline from a high of 1.1788 to a 6-month low of 1.1699.

The currency pair was on a downtrend from the Asian session, which accelerated after the release of the Markit France Services PMI. The French services PMI came in at 54.3 versus the expected 57.2, while the Markit France Composite PMI was recorded at 54.5 as compared to the expected 56.6. The Markit Germany Services PMI also missed expectations by coming in at 52.1, which was lower than the expected 53.1. Finally, the Markit Eurozone Manufacturing PMI also missed consensus estimates by coming in at 55.5 versus the expected 56.0. The Markit Eurozone Services PMI was also lower than expected. The upbeat Markit France Manufacturing PMI could not reverse the pair’s downtrend.

The currency pair’s decline was further fueled by the resurgence in US dollar demand as tracked by the US Dollar Index, which hit a high of 93.98. The risk sentiment in the financial market was lowered overnight by Donald Trump‘s administration’s optimism regarding recent trade talks.

The currency pair’s short-term performance is likely to be influenced by the Eurozone consumer confidence survey and the publication of FOMC minutes later today.

The EUR/USD currency pair was trading at 1.1709 as at 11:08 GMT having declined from a high of 1.1788. The EUR/JPY currency pair was trading at 128.54 having dropped from a high of 130.65.

If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.

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