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Euro Rallies on Upbeat Euro Area PMIs, Falls on Strong US PMIs

May 21, 2020 at 18:42 by Simon Mugo

Assorted stacks of euro coins with euro banknotes

The euro today rallied higher against the US dollar earlier today lifted by positive PMI reports from across the euro area released by Markit Economics. The EUR/USD currency pair later fell after the release of positive PMI data from the US amid rising Sino-US tensions.

The EUR/USD currency pair today rallied to a high of 1.1008 in the mid-European session  before crashing to a low of 1.0937 in the American session but was off these lows at the time of writing.

The currency pair fell during the Asian session amid subdued action before recovering in the European session after the release of the preliminary Markit France Manufacturing PMI, which came in at 40.3 beating analysts estimates of 36.1; the services PMI also beat expectations. The flash manufacturing and services PMI for the eurozone also beat analysts’ estimates boosting the pair. However, the preliminary Markit German manufacturing PMI print missed consensus estimates by coming in at 36.8 versus the expected 39.2, but Germany’s services PMI beat expectations.

The pair’s performance was also affected by the greenback’s swings as tracked by the US Dollar Index, which hit a high of 99.51 today. The pair hit its daily high after the release of the disappointing US jobless claims report by the Department of Labor. However,  the pair fell after the release of upbeat US PMI data by IHS Markit.

The currency pair’s future performance is likely to be affected by geopolitical events and US dollar dynamics.

The EUR/USD currency pair was trading at 1.0954 as at 18:40 GMT having dropped from a high of 1.1008. The EUR/JPY currency pair was trading at 117.94 having dropped from a high of 118.52.

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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