- EUR/USD slides to near 1.1300 as the flash Eurozone PMI data surprisingly contracted in May.
- US President Trump warns that Russia could avoid ending the war in Ukraine.
- ECB’s Nagel is hopeful of an EU-US trade deal.
EUR/USD faces selling pressure and falls to near 1.1300 during European trading hours on Thursday. The major currency pair drops as the Euro (EUR) underperforms after the release of the surprisingly weak preliminary Eurozone HCOB Purchasing Managers’ Index (PMI) data for May. The report showed that the Composite PMI fell to 49.5 from 50.4 in April, suggesting that the overall business activity declined. A figure below the 50.0 threshold is seen as a contraction in business activities.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.29% | 0.17% | -0.11% | 0.14% | 0.22% | 0.62% | 0.15% | |
| EUR | -0.29% | -0.12% | -0.41% | -0.16% | -0.08% | 0.33% | -0.14% | |
| GBP | -0.17% | 0.12% | -0.31% | -0.03% | 0.06% | 0.43% | -0.01% | |
| JPY | 0.11% | 0.41% | 0.31% | 0.24% | 0.35% | 0.72% | 0.25% | |
| CAD | -0.14% | 0.16% | 0.03% | -0.24% | 0.10% | 0.48% | 0.02% | |
| AUD | -0.22% | 0.08% | -0.06% | -0.35% | -0.10% | 0.39% | -0.08% | |
| NZD | -0.62% | -0.33% | -0.43% | -0.72% | -0.48% | -0.39% | -0.47% | |
| CHF | -0.15% | 0.14% | 0.01% | -0.25% | -0.02% | 0.08% | 0.47% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
According to the PMI report, activities in the services sector contracted unexpectedly for the first time since November 2024, while the Manufacturing PMI contracted at a slower-than-expected pace. Signs of business activity contraction are unfavorable for the Euro.
Additionally, uncertainty over the outcome of the Russia-Ukraine ceasefire talks in Vatican City has also weighed on the Euro. On Wednesday, United States (US) President Donald Trump ruled out hopes of a ceasefire after stating in a private conference call with European leaders that Russian leader Vladimir Putin isn’t ready to end the war because he thinks he is winning, the Wall Street Journal (WSJ) reported. Diminishing hopes of a truce between Russia and Ukraine could keep the Euro on the backfoot.
There is a notable shift in US President Trump’s stance on war in Ukraine from what he stated in a post on Truth.Social earlier this week, that both nations have agreed to immediate truce talks, and expressed confidence that both countries will focus on ending the war in Ukraine. However, Trump didn’t provide a timeframe for truce talks.
Another reason behind the pressure on the Euro is the firm expectation that the European Central Bank (ECB) will cut interest rates again in the June policy meeting. ECB officials have signaled the need for further monetary policy expansion to offset downside risks to Eurozone inflation. “In order to be able to keep inflation at the target of 2%, [the ECB] may have to come below the natural rate in the range of 1.5% to 2%, ECB Governing Council member and Governor of the Bank of Portugal Mario Centeno said on Wednesday.
On the global front, Bundesbank’s President Joachim Nagel has expressed confidence over progress in trade talks with the US, stating that Washington and Brussels have acknowledged that trade conflicts have no winners, on German Television at the sidelines of the G7 meeting in Canada, Reuters reported. “I also believe that the US side now understands some things better, and I am a little more confident than I perhaps was a few days ago,” Nagel said.
Daily digest market movers: EUR/USD drops as USD rebounds
- The downside move in the EUR/USD pair has also arrived on the back of a recovery move in the US Dollar (USD). The USD recoups intraday losses and turns slightly positive, while fears of a widening fiscal crisis have raised concerns about the already high national debt are expected to keep the currency on the backfoot.
- On Wednesday, the House Rules Committee, controlled by Republicans, approved President Donald Trump’s new tax bill and advanced it for a full House vote.
- According to the nonpartisan Congressional Budget Office, Trump’s tax-cut bill would increase the US debt by $3.8 trillion over the decade, which is currently $36.2 trillion. On Friday, Moody’s downgraded the US Sovereign Credit rating to Aa1 from Aaa, citing concerns over large debt, which led to a sharp increase in borrowing costs for the administration.
- On the monetary policy front, Federal Reserve (Fed) officials keep arguing in favor of holding interest rates at their current level amid unusually elevated uncertainty over the US economic outlook due to President Trump’s imposition of new economic policies.
- On Wednesday, JPMorgan Chase & Co. CEO Jamie Dimon supported the Fed’s decision to maintain a restrictive interest rate guidance, warning of stagflation risks from geopolitics, deficits, and price pressures, Bloomberg reported. “The Fed is doing the right thing to wait and see before it decides on monetary policy,” Dimon said and added, “I don’t agree that we’re in a sweet spot.”
- Meanwhile, investors await the preliminary US S&P Global PMI data for May, which will be published at 13:45 GMT.
Technical Analysis: EUR/USD slips to near 1.1300
EUR/USD falls to near 1.1300 on Thursday. However, the near-term outlook of the pair is bullish as it holds the 20-day Exponential Moving Average (EMA), which is around 1.1240.
The 14-period Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, suggesting indecisiveness among traders.
Looking up, the April 28 high of 1.1425 will be the major resistance for the pair. Conversely, the psychological level of 1.1000 will be a key support for the Euro bulls.
Economic Indicator
HCOB Composite PMI
The Composite Purchasing Managers’ Index (PMI), released on a monthly basis by S&P Global and Hamburg Commercial Bank (HCOB), is a leading indicator gauging private-business activity in the Eurozone for both the manufacturing and services sectors. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the Euro (EUR). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for EUR.
Read more.
Last release:
Thu May 22, 2025 08:00 (Prel)
Frequency:
Monthly
Actual:
49.5
Consensus:
50.7
Previous:
50.4
Source:
S&P Global
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