The euro is currently trading around $1.08, its lowest level since March 6th, as investors digest recent PMI data and comments from European Central Bank (ECB) officials. The latest PMI data showed that Eurozone private sector activity is expanding, but at a slower pace than expected, while ECB officials are increasingly suggesting a potential rate cut.
- The euro hovered around the $1.08 mark, its weakest level since March 6th.
- Eurozone private sector activity expanded at its fastest pace since August, but fell short of market expectations.
- A rebound in manufacturing output was partially offset by a slowdown in the services sector.
- ECB official Cipollone suggested the case for a rate cut is strengthening.
- ECB official Stournaras stated that all signs point to a rate cut in April.
- President Lagarde cautioned about weaker economic growth but downplayed inflation risks.
- ECB’s de Galhau reinforced the view that the central bank has room to further ease borrowing costs.
The confluence of factors suggests a weakening outlook for the euro. Slower than anticipated growth in the Eurozone, combined with increasing signals from the ECB that a rate cut is likely, indicates potential downward pressure on the currency. The market appears to be pricing in these factors, contributing to the euro’s current level.