Will the Euro end the EUR/USD rally? – Commerzbank

Since the beginning of August, the EUR-USD has been in a steady uptrend, and periods of stabilization have been short-lived, notes Michael Pfister, FX analyst at Commerzbank.

PMI figures are more complicated than 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 remained virtually unchanged since early August. This should come as no surprise as recent data from the eurozone has been almost entirely in line with expectations.”

“This could happen today with the release of PMIs. The reading was higher, but the boost comes largely from an increase in service activity in France, likely related to the buzz surrounding the Paris Olympics. In contrast, Germany’s PMIs were negative, so the market may be pricing in more rate cuts and EUR/USD’s highs may be over for now.”