Eurozone July PMI hits a five-month high of 51.9, exceeding expectations and bolstering ECB rate hike bets for September.
The EUR/JPY cross stabilizes near 186.30 after touching a 12-week high of 186.67, as stronger Eurozone economic data offsets weak Yen sentiment. The Eurozone HCOB Composite PMI rose to 51.9 in July, surpassing the 50.2 forecast and June’s 50.0 print.
Services PMI climbed to 51.6 from 49.4, while Manufacturing PMI reached 52.0, up from 51.4. The data reinforces expectations of ECB policy tightening, with traders pricing in a 25 basis point hike in September. The ECB held rates steady on Thursday but signaled further action if inflation risks persist.
ECB policymaker Gediminas Šimkus noted inflation remains above target, keeping a rate hike more likely than a pause. The Yen’s broader weakness continues to support the cross, despite mixed Japanese data.