The euro dipped against major currencies due to disappointing economic data and decreasing eurozone bond yields. Euro area industrial production declined 1.3% month-on-month in June, reversing a previous gain and missing market expectations. This economic setback heightened concerns regarding EU growth, particularly after a drop in the ZEW Economic Sentiment Index. Concurrently, yields on German and French government bonds decreased significantly. Looking forward, traders will watch upcoming PMI releases and euro area confidence data for additional indicators of economic performance, as any further signs of weakness may affect both the euro and bond yields.
The euro fell against major peers on Thursday as weaker-than-expected economic data and a broad decline in eurozone bond yields pressured the currency.
Euro area industrial production fell 1.3% month-on-month in June, reversing May's 1.1% gain and missing expectations, with sharp declines in capital goods and non-durable consumer goods output.
The sharp drop in eurozone industrial output and weaker sentiment data could reinforce demand for safe-haven debt, driving yields lower.
Traders will monitor next week's PMI releases and euro area confidence data for further signals on economic momentum, as continued weakness could weigh on the euro.
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