Euro: Softer PMIs challenge ECB tightening case – BNY

FXStreet Insights Team FXStreet

Geoff Yu at BNY highlights that Eurozone PMIs remain weak despite a slightly better-than-expected composite reading. Core economies like Germany and France continue to underperform, with German services at a 43‑month low. Softer inflation pressures in the PMI data raise questions over the European Central Bank’s assessment of demand and the necessity of further rate hikes, weighing on the Euro.

Weak core data and easing price pressures

"The composite Eurozone PMI was better than expected at 49.5 (consensus: 49.2), and manufacturing also showed some expansion at 51.3 (consensus: 51.6)."

"However, the core names such as Germany and France continued to perform poorly."

"German manufacturing PMI was flat at 50.0, but services fell to a 43-month low of 46.8."

"The figures will certainly lead to questions over the ECB’s current assessment of Eurozone demand conditions to justify tightening."

"Reports of softer inflation pressures in the reports also lead us to question the necessity of further hikes."

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

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD extends losses toward 1.3200 on broad USD strength

GBP/USD declines toward 1.3200 in the second half of the day on Tuesday. Political uncertainty in the United Kingdom weighs on the British Pound, alongside weak business PMI data for June. Meanwhile, the US Dollar capitalizes on the risk-off mood and stronger-than-forecast PMI readings, making it difficult for the pair to find its footing.

EUR/USD falls to fresh 12-month low below 1.1400

EUR/USD comes under renewed selling pressure in the second half of the day on Tuesday and trades at its lowest level since June 2025 below 1.1400. Mixed PMI data from Germany and the Eurozone makes it difficult for the Euro to find demand, while the risk-averse market atmosphere and the upbeat PMI prints support the USD, forcing the pair to stay on the back foot.

Gold drops to nearly two-week low, tests $4,100

Gold (XAU/USD) turns south following Monday's rebound and trades deep in the red near $4,100 on Tuesday. Despite positive signals from US-Iran peace talks, widespread skepticism remains toward a final deal and weighs on the precious metal. In the meantime, the USD gathers strength on hawkish Fed expectations and drags XAU/USD lower.

Crypto Today: Bitcoin, Ethereum, XRP slide as capital outflows persist

The cryptocurrency market is experiencing broad-based declines on Tuesday, as Bitcoin retests support at $62,000, Ethereum extends losses toward $1,600, and Ripple remains anchored near the key $1.10 demand zone.

Will PCE inflation data fuel bets of early Fed rate hike?

Warsh’s hawkish debut sparks sharp repricing in Fed funds futures. Inflation is front and centre as September hike now seen likely. Will PCE report due Thursday, 12:30 GMT, support the hawkish bets?

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.