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Euro firms versus dollar as Eurozone PMI beats expectations

BBH says swaps have essentially fully priced a 25 basis point ECB hike for September after the Eurozone composite PMI rose to a nine month high.

Reported · Written up by our desk · Major Pairs

EUR/USD was firmer, supported by broad US dollar weakness and stronger than expected Eurozone August PMI data, according to Brown Brothers Harriman (BBH) strategist Elias Haddad, as summarized by FXStreet.

BBH pointed to the Eurozone composite PMI rising to a nine month high of 52.1, above the 51.7 consensus and 52.0 prior, with manufacturing driving the improvement while services growth held steady versus July.

The note also highlighted that interest rate markets have effectively priced a 25 basis point ECB hike in September, with about 60 basis points of tightening over the next twelve months, placing rates near the top of the ECB’s neutral range.

Latest closeEUR/USD 1.157 ▲0.4%

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