EUR/USD resumes the downside well south of 1.0500.Germany June Final Manufacturing PMI came at 52.0.The selling bias re-emerged in the risk complex and drags EUR/USD back to the mid-1.0400s on Friday.
EUR/USD weak on risk-off trade, looks to data.EUR/USD rapidly fades Thursday’s rebound and refocuses on the downside on the back of the resumption of the buying pressure in the greenback, while the German 10y Bund yields attempt a mild rebound at the end of the week.
In the meantime, the risk aversion continues to dictate the price action around spot and the rest of the global assets, mainly in response to rising fears surrounding a potential global slowdown. In addition, the recent inaction of the ECB when it comes to its plans regarding the fragmentation issue also collaborates with the sour sentiment around the European currency.
In the domestic calendar, final figures saw the German and EMU Manufacturing PMI at 52.0 and 52.1, respectively, in June. Later in the session, ECB Board member F.Panetta us due to speak while the release of EMU flash inflation figures for the month of June will also be in the limelight.Across the Atlantic, the final June Manufacturing PMI is due along the more relevant ISM Manufacturing.
What to look for around EUR
EUR/USD faces the re-emergence of the risk-off mood and the subsequent drop to the area well below 1.0500 so far this week.In the meantime, the single currency continues to digest news from the ECB Forum in Portugal as well as any developments surrounding the bank’s plans to design a de-fragmentation tool in light of the upcoming start of the hiking cycle.
However, EUR/USD is still far away from exiting the woods and it is expected to remain at the mercy of dollar dynamics, geopolitical concerns and the Fed-ECB divergence, while higher German yields, persistent elevated inflation in the euro area and a decent pace of the economic recovery in the region are also supportive of an improvement in the mood around the euro.
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GBP/USD drops two fresh multi-week lows below 1.2050
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