Surging euro hits four-month high
The euro keeps pushing higher and is up for a fourth straight day. EUR/USD is trading at 1.0913, up 0.34% on the day. Earlier, the euro touched a high of 1.0920, its highest level since March 21.
The US dollar has hit a rough patch in recent weeks and has lost ground against the major currencies. The euro has sparkled in July, gaining 1.9%.
Eurozone industrial production recorded a sharp decline for a second straight month, a reminder that the manufacturing sector is still in trouble, with weakening demand across most of the eurozone and a global economy that is still trying to find its footing.
Annually, eurozone industrial production declined 2.9% y/y in May, following a revised 3.1% decline in April. Monthly, the indicator declined 0.6% in May, lower than the revised April reading of 0%. Both readings were better than expected, but point to contraction in production.
The week ended with the US Producer Price index accelerating unexpectedly in June to 2.6% y/y, up from a revised 2.4% and above the market estimate of 2.3%. This was the highest level since March 2023. Monthly, PPI edged up to 0.2%, up from a revised 0% in May and above the 0.1% market estimate.
The higher-than-expected PPI report didn’t make much of a dent in market expectations for a September rate cut, which stand at 88%, according to the CME’s FedWatch. PPI tends to be erratic and the jump in the June data likely doesn’t point to a buildup in inflationary pressures. Last week’s June CPI report was softer than expected and boosted market expectations for an initial rate cut in September.
EUR/USD has pushed above resistance at 1.0893. Next, there is resistance at 1.0925
There is support at 1.0876 and 1.0844
The US dollar has hit a rough patch in recent weeks and has lost ground against the major currencies. The euro has sparkled in July, gaining 1.9%.
Eurozone industrial production recorded a sharp decline for a second straight month, a reminder that the manufacturing sector is still in trouble, with weakening demand across most of the eurozone and a global economy that is still trying to find its footing.
Annually, eurozone industrial production declined 2.9% y/y in May, following a revised 3.1% decline in April. Monthly, the indicator declined 0.6% in May, lower than the revised April reading of 0%. Both readings were better than expected, but point to contraction in production.
The week ended with the US Producer Price index accelerating unexpectedly in June to 2.6% y/y, up from a revised 2.4% and above the market estimate of 2.3%. This was the highest level since March 2023. Monthly, PPI edged up to 0.2%, up from a revised 0% in May and above the 0.1% market estimate.
The higher-than-expected PPI report didn’t make much of a dent in market expectations for a September rate cut, which stand at 88%, according to the CME’s FedWatch. PPI tends to be erratic and the jump in the June data likely doesn’t point to a buildup in inflationary pressures. Last week’s June CPI report was softer than expected and boosted market expectations for an initial rate cut in September.
EUR/USD has pushed above resistance at 1.0893. Next, there is resistance at 1.0925
There is support at 1.0876 and 1.0844
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