EURUSD loses ground near 1.0808 in Friday’s early Asian session.
During the early European session on Friday, the EURUSD pair extended its drop to about 1.0808.
The US PMI data is positive, and the Fed’s hawkish comments strengthen the Greenback.
The US Dollar (USD) has recovered substantially, aided by higher US PMI data, dragging the key pair down. The German GDP for the first quarter (Q1) is due on Friday. The quarterly GDP is expected to expand 0.2% quarter on quarter. But the annual GDP is expected to fall 0.2% year on year in Q1.
The greenback edged higher on the encouraging US economic statistics was issued on Thursday. The US S&P Global flash May Composite Purchasing Managers Index (PMI) rose to 54.4 in May from 51.3 in April. Its highest level since April 2022. Meanwhile, the Manufacturing PMI improved to 50.9 in May, up from 50.0 in April. In May, the Services PMI rose to 54.8 from 51.3 the month before. Both figures outperformed the market consensus. Furthermore, the weekly Initial Jobless Claims for the week ending May 18 fell to 215K from 223K the previous week, below the estimate of 220K.
Traders increase their bets for ECB rate cuts in June, dragging on the euro.
Atlanta Fed President Raphael Bostic said on Thursday. That the US central bank may need to wait longer before cutting interest rates because he still expects rising inflation pressure. His hawkish remarks. Strengthen the US dollar (USD) against the Euro (EUR).
Across the pond, there is rising anticipation that the European Central Bank (ECB) will begin decreasing interest rates before the Fed imposes some selling pressure on the euro. ECB President Christine Lagarde stated that she is “really confident” that Eurozone inflation is under control and that an interest rate drop is likely next month. According to LSEG statistics, financial markets are presently pricing in a 25 basis point (bps) drop for June.
