Euro Edges Lower on Mixed Eurozone PMI

08/22/2024

1 minute read

2024.08.22 10:04

The euro is steady on Thursday. In the European session, 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 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.

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 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 on Friday, and the markets will be all ears. EUR/USD-4-Hour Chart