Published on 24.03.2023 14:11

The Euro has slumped against the US dollar as we enter today’s trading session after a mixed round of data from the Eurozone with investors booking profits while awaiting the release of the latest durable goods orders figures later today during the American session.

The Eurozone manufacturing sector contraction deepened in March, the latest manufacturing activity survey from S&P Global research showed on Friday.

The Eurozone Manufacturing Purchasing Managers Index (PMI) hit the market at at 47.1 in March against analysts’ expectations for a figure of 49.0 and well below the previous months figure of 48.5 which marks a 4-month low.

The Services PMI came in at 55.6 in March against predictions for a figure of 52.5 and higher than last month’s figure of 52.7 while the S&P Global Eurozone PMI Composite jumped to 54.1 in March vs 51.9 estimated and 52.0 from last month.

The Euro is now down for a 2nd straight day against the greenback after rising for the 5 previous trading sessions, boosted by expectations that the US federal reserve may be nearing the end of their rate hiking program.

On the other end of the spectrum in seems as if the ECB is not done with their rate hiking cycle yet and European Central Bank (ECB) policymaker Joachim Nagel noted earlier today that the ECB's current interest level was not high in comparison to rates of inflation in the Eurozone.

"Wage developments are likely to prolong the prevailing period of high inflation rates. In other words: Inflation will become more persistent." Nagel said.

"It will be necessary to raise policy rates to sufficiently restrictive levels in order to bring inflation back down to 2% in a timely manner," he added.

Looking further ahead today, the main drivers of the EUR/USD currency pair will be the release of the durable goods orders figures from the US which are expected to rebound strongly from last month’s disappointing figure of -4.5 percent and if analysts are correct, the Euro may face further losses as we head into the weekend.