Weaker-than-expected German Services PMI data weighs on the euro as traders await Eurozone PMI figures later Tuesday.
EUR/USD retreated from daily gains to trade near 1.1430 after Germany’s HCOB PMI data fell short of forecasts. The Services PMI dropped to 46.8 in June, below the 48.7 consensus, while Manufacturing PMI held steady at 50.0, matching expectations.
Germany’s Services sector contraction deepened, contrasting with May’s 48.1 reading. The Manufacturing PMI remained at the expansion-contraction threshold, signaling stagnation. Traders now await Eurozone PMI data for further direction.
The US Dollar’s strength, driven by hawkish Fed sentiment, continues to cap EUR/USD upside. Markets price an 85% chance of a 25-basis-point Fed rate hike by year-end, with Thursday’s PCE data in focus.