Weekly Roundup: Euro sheds gains on abysmal PMIs
Amy Richards June 26th 2023 - < 1 minute read
A lull in Eurozone economic data muted the euro on Monday.
The common currency then edged higher as the week went on thanks to a risk-off market mood boosting the euro’s safe-haven appeal. However, a fall in German PPI capped gains.
Recent hawkish comments from European Central Bank (ECB) policymakers kept EUR underpinned, though, with the currency firming in mid-week trade.
Russia-Ukraine worries then hit EUR on Thursday. After Kyiv used UK-supplied missiles to attack a bridge in Crimea, some analysts feared brutal retaliatory strikes from Moscow.
More woes hit the single currency at week’s end, with the Eurozone’s PMIs printing below estimates. Most worryingly, manufacturing activity in the bloc contracted at its sharpest pace in three years.
This week, the spotlight will be on the Eurozone’s latest consumer price index. Another expected cooldown in headline inflation could dent ECB bets and the euro. However, an uptick in core inflation may offset the downside.
Ahead of the CPI, the ECB’s Forum on Central Banking could impact EUR. Investors will be listening carefully to ECB policymakers for hints about the bank’s policy plans.
Written by
Amy Richards