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Euro slips to late-July lows after stronger-than-expected eurozone surveys

Eurozone flash PMI beat forecasts, but the euro slid as markets increasingly price additional Fed action while the ECB is set for its Oct. 29 decision.

Reported · Written up by our desk · Major Pairs

Europe's euro slid to its lowest level since late July after September business surveys showed the eurozone economy running hotter than expected. The eurozone flash PMI composite came in at 53.1 versus a 51.5 forecast, with services at 53 versus 51.7, yet EUR/USD was trading just under 1.1400 on track for a third straight losing session.

In the US, the same release calendar is helping shift rate expectations. FXStreet said US surveys beat forecasts by more and traders added to bets on another Fed increase on Oct. 28, while the ECB next meets on Oct. 29, one day after the Fed.

FXStreet noted the ECB already moved, raising its deposit rate to 2.50% on Sept. 10, its second increase this year, and that ECB officials speaking later in the week are likely to point to strong survey data as they weigh another hike. Germany's governing coalition is also arguing in public after losses in two state elections, adding another factor weighing on the euro.

The piece also highlighted a potential near-term catalyst from the US side, with weekly jobless claims due Thursday at 12:30 GMT, forecast at 201K, where a rise could quickly cool expectations for the October Fed increase. It flagged technical levels including 1.1400 as near-term resistance, 1.1350 as first support, and 1.1500 as a level that would take the short bias off the table if EUR/USD closes above it.

Latest closeEUR/USD 1.138 ▼0.6%

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