EUR/USD Forecast: The Optimistic Economic Data of Eurozone
The eurozone’s manufacturing sector climbed at a record pace for the fourth month in a row in June, while demand grew with further easing of anti-virus measures, the final data of IHS Markit showed on Thursday. The final index of procurement managers rose to 63.4 in June from 63.1 in May, and the reading was higher than the estimate of 63.1.June marked the twelfth consecutive month that the index posted above the 50.0 ratings without changing the line separating growth from falling.
Production growth continued to rise in June, increasing slightly since May. Manufacturers struggled to achieve higher sales in June, as evidenced by a serial record increase in backlogs. Total employment grew at the strongest pace. Confidence in future production rose in June and reached a level that was close to April data.
The German manufacturing sector showed better performance in June, with production rates and growth in new orders, for the first time in three months. IHS Markit / BME for PMI production advanced to 65.1 in June from 66.4 in the previous month. The economist’s estimate was 64.9.
The French manufacturing sector ended the second quarter with another strong growth in production, new orders, and employment. Although PMI in production was slightly below expectations at 59.0 in June from 59.4 in May, the index indicated another significant increase. The forecast was 58.6.
Spain’s manufacturing sector has been growing at the fastest pace since April 1998. Factory PMI advanced to 60.4 in June from 59.4 in May.
The Italian manufacturing sector expanded at the second-fastest pace in the 24-year history of the survey. PMI reached 62.2 in June, in line with expectations, but slightly higher at 62.3 in May.
The unemployment rate fell to 7.9 percent in May from 8.1 percent in the previous month. The forecast was that the rate would drop slightly to 8 percent. The number of unemployed decreased by 306,000 compared to the previous month. Youth unemployment has fallen by 138,000 since April.
Looking at the chart, the EUR/USD pair is currently sitting at 1.18500. Despite the good news for the euro, the dollar is holding steady, showing no signs of weakness. A break below 1.18000 directs us to the previous low to 1.17000, while otherwise, if the euro manages to consolidate better, we can see a jump to 1.20200 61.8% Fibonacci level.
