The euro climbed slightly after data released from the eurozone private sector boosted hopes that a recession could be avoided in the bloc’s economy.

As expectations for further cuts by the FED continued, the USD was down 0.2%, after better-than-expected French and German PMI data came through. 

However, not all reports were sparkling, as activity in Germany’s manufacturing sector is still at recession levels, indicating that the eurozone economy is staggering along with only slight growth. 

Germany’s new orders fell at their fastest rate since April 2013, while employment growth was the weakest since 2014. 

Elsewhere, the dollar fell 0.15% to 106.44 against the yen, after a 0.36% gain yesterday.

Policymakers highlighted concerns about the decline of the global growth and trade tensions, however, expectations for another rate cut at the central bank’s September meeting were tempered. 

According to the Fed minutes, “Most participants viewed a proposed quarter-point policy easing at this meeting as part of a recalibration of the stance of policy, or mid-cycle adjustment, in response to the evolution of the economic outlook over recent months.” 

Tensions are high as investors eagerly await Fed Chairman Jerome Powell’s speech tomorrow, indicating which way the US central bank will go with regard to its rates.

Incoming economic data will also continue to be monitored for signs of how the unresolved US-China trade war may be impacting the global economy.

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Dalia Hilmi

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