Since the beginning of August, EUR-USD has been in a steady upward trend, and periods of stabilisation have been short-lived, Commerzbank’s FX analyst Michael Pfister notes.

The PMI figures are trickier than was expected

“Yesterday, the pair even hit a new high for the year. However, this is almost entirely a USD story. The US Dollar continues to depreciate steadily, while the euro has been virtually unchanged since the beginning of August. This should come as no surprise, as recent data from the euro area has been almost entirely in line with expectations.”

“This could may today with the release of the PMIs. The reading was higher, but the boost largely comes from a surge in services activity in France, likely linked to the buzz surrounding the Olympic Games in Paris. In contrast, the Germany’s PMIs came negative, so the market may price in more rate cuts and the highs in EUR/USD may come to an end for the time being.”