The euro experienced a downturn, retreating from a recent high against the dollar as German economic sentiment disappointed expectations. The currency’s decline occurred amidst mixed economic data from the Eurozone and cautious signals from the US Federal Reserve regarding future interest rate decisions.
- The euro weakened toward $1.178, after reaching a four-year high of $1.192 on September 17.
- The Ifo Business Climate Index in Germany fell to 87.7 in September, below expectations.
- The HCOB PMI survey showed the Eurozone private sector expanding in September, with services stronger than expected but manufacturing contracting.
The presented factors suggest a period of uncertainty for the euro. Weaker than expected German economic data creates doubt about the strength of the Eurozone economy. While the services sector shows resilience, a contraction in manufacturing raises concerns about overall economic balance. These elements, combined with the anticipation of potential US interest rate cuts, place downward pressure on the euro’s value.