Weaker German PMIs and a widening US-EU growth divergence push EUR/USD toward 1.1300, ING analysts note.
EUR/USD is testing the 1.1300 level as a widening US-EU growth gap pressures the euro. Recent equity sell-offs and weaker-than-expected German PMI data have reinforced the divergence narrative, analysts said.
The two-year swap differential between EUR and USD has also widened, adding to downward pressure on the currency pair. Earlier prints showed German manufacturing and services PMIs falling short of consensus, while US data remained relatively resilient.
The dollar has regained strength amid the risk-off sentiment, further weighing on the euro. Market focus remains on growth differentials and central bank policy expectations.