Home / Blog / Category / Fundamental Analysis / Euro Recovers Above $1.0650, Lifted by Positive German PMI Data in Contrast to Weaker US PMI Figures
23 April 2024 | FXGT.com

Euro Recovers Above $1.0650, Lifted by Positive German PMI Data in Contrast to Weaker US PMI Figures

  • EURUSD Performance: The euro has stabilized above $1.0650, although it remains near its five-month low, following positive German flash PMI data released earlier today.

  • Economic Growth: April’s PMI data indicated the strongest growth in Eurozone business activity in nearly a year. Notably, Germany showed growth after nine months of contraction, signalling a potential economic recovery.

  • ECB Policy Outlook: Recent statements from ECB officials have shown a readiness to lower interest rates potentially starting in June. Market expectations suggest up to three rate cuts could take place by the end of 2024.

  • US S&P Global Composite PMI: Composite PMI fell to 50.9 in April from 52.1, indicating a slowdown in private sector expansion. The Manufacturing sector experienced a contraction, with the PMI dropping to 49.9 from the previous 51.9. Service Sector also saw a decline, with the Services PMI decreasing slightly from 51.7 to 50.9.

  • Market Sentiment Shift: Despite the positive economic indicators in Europe, broader market sentiment has been tempered by ongoing inflation concerns in the US. This has led to moderated expectations for rate cuts from both the ECB and the Federal Reserve.

  • Key Data Ahead: Investors are now focused on upcoming US inflation data to be released on Friday, which will provide crucial insights into future monetary policy decisions by major central banks.

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