Kit Juckes, Chief Global FX Strategist at Société Générale, expects the EUR/USD pair to remain under downside pressure as activity in manufacturing declines.

US curve continues to cut back its H2 rate cut expectations

“The Euro needed the recent weakness in manufacturing industry to show signs of turning itself around if the euro were to find a base and a bid. That didn’t happen to put it mildly. The headline composite PMI, at 53.3, is OK and close enough to expectations of 53.5, but manufacturing was weak again, at 44.6. That’s the lowest figure since May 2020.”

“EUR/USD has slipped below 1.08 and for now, the correction continues as Treasury yields move higher and the US curve continues to cut back its H2 rate cut expectations.”