EUR/USD is unchanged on Monday, as the pair trades quietly in the mid-1.34 range in the European session. On the release front, it's a very quiet start to the week, with just two releases out of the US, highlighted by Pending Home Sales. There are no Eurozone releases on Monday.
On Friday, German Ifo Business Climate, a key indicator, dipped to 108.0 points, its third straight decline. There was better news from German Consumer Climate, which continued its upward trend, hitting 9.0 points, just above the estimate of 8.9 points. Germany has not been immune to Eurozone inflation woes, and we'll get a look at German Preliminary CPI on Wednesday, with the markets anticipating a small gain.
In one of the first signs that the ECB's recent rate cuts may be bearing fruit, Eurozone PMIs posted encouraging numbers on Thursday. German Services and Manufacturing PMIs improved in June and beat their estimates. Services PMI was particularly impressive, hitting a three-year high, at 56.6 points. In the Eurozone, Services PMI easily beat the estimate, while Manufacturing PMI met expectations. French data, however, failed to keep pace with its European counterparts. Manufacturing PMI came in below the 50-point level, the mark that indicates expansion, for a second straight month, indicating contraction in the manufacturing sector. Services PMI pushed above 50 for the first time since March.
In the US, a positive week ended on a high note, as durable goods data exceeded expectations. Core Durable Goods Orders jumped 0.8%, beating the estimate of 0.6%, and rebounding nicely from a decline of 0.1% in May. Durable Goods Orders followed suit, posting a gain of 0.7%, compared to a weak reading of -1.0% last month. This easily surpassed the estimate of 0.4%. Earlier last week, Unemployment Claims tumbled, as the key indicator fell to 284 thousand, its lowest level since February 2008. This surprised the markets, which had expected a reading of 310 thousand. The strong release continues a string of solid employment data, which has helped the dollar. As well, positive news on the employment front is bound to increase speculation about a rate increase by the Federal Reserve.
EUR/USD 1.3436 H: 1.3438 L: 1.3427
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