Euro falls against dollar after PMI investigation

Euro falls to 20-year low against dollar after PMI investigation 03 / 07 / 22 William Hunter Visitors: 455 Rating: ★★★★★

The latest bearish candle followed the release of the S&P Global Composite Purchasing Managers' Index, a closely watched barometer of activity, which fell to 52.0 in June from 54.8 in May, the lowest reading in 16 months.

S&P said the figures show that eurozone growth likely slowed to about 0.2% in the second quarter, while a decline in new orders and employment figures indicates that the worst "will come in the coming months."

"The manufacturing sector is already in decline for the first time in two years, and the services sector has experienced a marked loss of growth momentum due to the cost of living crisis," said Chris Williamson, chief corporate economist at S&P Global Market Intelligence.

"Household spending on non-essential goods and services has come under particular pressure due to rising prices, but spending and business investment are also declining in response to a bleaker outlook and tightening financial conditions," he added.

A positive aspect of the survey was that inflationary pressures may begin to ease, S&P said, citing "a marked cooling in industrial price growth, improved supply chains and lower demand." Nevertheless, prices remain "high".

Any prolonged easing of price pressure will reduce pressure on the European Central Bank and its plans to raise interest rates. The bank's management led to the fact that the markets expected growth of 25 basis points in July and growth of 50 basis points in September.

In addition, the PMI provoked a sharp revision of these expectations: the yield of the German two-year bond, which is very sensitive to interest rates, fell by 13 basis points to 0.49%.


Comments (0)