The EURUSD exchange rate will be a focus on Tuesday with data from Germany and the US.
EURUSD: Weekly Chart
EURUSD saw a failed breakout at the 1.12 level and has slid back to the 1.10 mark.
Germany’s unemployment rate is expected to stay stagnant at the 5.7% level, with 20k additional unemployed added to the list.
The bigger release will be the US manufacturing PMI, with a move to 46.8 from 46 expected. The 50 level is the line in the sand between expansion and contraction, so a surprise figure closer to 50 would see a dollar rally.
The US economy posted stronger-than-expected figures for the second quarter with a resilient labour market and consumer spending. Businesses boosted investment in equipment and added to factory spend, keeping markets focused on a “soft landing” for the US.
Despite the broad acceleration in growth, inflation was slower in the previous quarter, with one of the key measures watched by the Federal Reserve showing its slowest increase in more than two years.
The personal consumption expenditures price index (PCE), which excludes food and energy, was up 3.8%, for the smallest gain since the first quarter of 2021, down from 4.9% seen in the January-March quarter.
“Despite the Fed’s campaign to slow growth and snuff out inflation, no recession is in sight,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University. “Stop raising rates for now.”
