The EUR/USD has crossed the 1.05 mark following the eurozone PMIs of 50.2, indicating slight economic expansion. While the UK also reported an encouraging PMIs figure of 50.9, concerns over stagflation loom. Although the eurozone's marginal growth is comforting for the ECB, it is not substantial enough to alter rate policy decisions. Inflation worries prevail, especially as output prices rise rapidly. Meanwhile, the UK faces potential job losses and cost pressures, reflecting a bleak outlook amid increased uncertainty regarding both economies' fiscal health and growth prospects.
EUR/USD has breached the 1.05 level after the eurozone PMIs (50.2) beat expectations, indicating slight economic expansion, although concerns about inflation persist.
The return to marginal growth in the eurozone, while reassuring for the ECB, does not change the expected trajectory for upcoming policy meetings.
The UK's PMIs showed mild growth, but significant concerns about cost pressures and job shedding remain, echoing sentiments from the Financial Crisis.
Inflationary pressures are raising doubts about rate cuts for both the eurozone and UK, creating uncertainty in the fiscal landscape.
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