Euro: Dollar strength pushes EUR/USD below 1.1400 – Danske Bank

FXStreet Insights Team FXStreet

Danske Research Team notes that the US Dollar (USD) strengthened across G10, driving EUR/USD below 1.1400. The move came alongside a broader risk-off tone, with equities lower, VIX higher and Oil prices retreating. They highlight that global yields edged lower across tenors, underlining a cautious market backdrop for the Euro against the Dollar.

Dollar gains weigh on Euro

"The USD appreciated against the rest of G10 yesterday, which sent EUR/USD below 1.14, USD/SEK above 9.70 and USD/NOK above 9.80."

"Euro area PMIs in June surprised on the upside with the composite PMI rising to 49.5 (cons.: 49.2, prior: 48.5). Manufacturing was slightly weaker at 51.3 (cons.: 51.6, prior: 51.6) while services surprised on the topside at 48.9 (cons.: 48.6, prior: 47.7)."

"The decline in manufacturing was due to delivery times falling while both new orders, employment and output rose, which makes the manufacturing print slightly stronger than what face value suggests. The positive surprise in services comes after Germany surprised significantly to the downside which suggests that Southern Europe have seen decent increases."

"In Germany, the Ifo indicator for June is released. Yesterday's PMI report surprised significantly on the downside for the services sector. It will be interesting to see if the Ifo indicator shows the same picture of the German economy, which would be worrying. "

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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