Forex Market: Euro Price Rises on Strong Macro Data

The moment so awaited by many investors has arrived: the publication of the PMIs in the Eurozone for the month of June. Tuesday is loaded with solid macro data of utmost importance to the Forex market, and thanks to it, the price of the euro rose.

We will also briefly look at the performances of other currencies in the Forex market, such as the Australian dollar, the Chinese yuan, the Japanese yen and the Norwegian krone.

Below is a complete analysis of the Forex market…

Forex market: 5 key points for next week

Forex Market: Euro price rises thanks to macro data such as PMI
The private consulting firm Crypto Trader published the Eurozone’s PMI, presenting more positive recovery figures than expected. The French case is particularly noteworthy, recovering after an unprecedented three-month fall.

The French PMI presented a composite reading of 51.3, with 50.3 in the service sector and 52.1 in the manufacturing sector. The values were above expectations, exceeding the 50 points that indicate growth.

The Eurozone composite PMI gave a figure of 47.5, fifteen points above the 31.9 seen in May. Other interesting results were those of Germany, where the composite PMI rose to 45.8 points as in the service sector, and 46.9 in manufacturing.

All these values have a direct impact on the euro’s price, which rises 0.6% to $1,1325. This is its highest level since June 16, representing investors‘ hope for possible economic growth.

George Buckley, an economist at Nomura, has an opinion on this feeling:

„The good news is that activity is starting to pick up. The less positive news is that demand is slowing down and remains moderate (…) However, excluding the possibility of a second wave, demand should also recover, albeit at a slower pace, as consumer and business confidence increases“.

Forex Market: Dollar Falls on All Fronts

Australian Dollar and Japanese Yen React to Peter Navarro’s Remarks
Since we know that the price of the euro is rising, other currencies also rose after White House trade adviser Peter Navarro retracted his comment on the US trade agreement with China. In his words, the agreement was „over“.

Navarro said on Monday that the trade agreement was still on hold, after his earlier comment fuelled volatility in the markets. He said it had been taken „wildly out of context“. President Donald Trump said in a tweet that the trade agreement is „completely intact.

The Australian dollar rose 0.7% to 0.6950, after reaching 0.6977, its highest level since June 16.

The Japanese yen, which was considered a safe haven, remains low against the USD at 106.47.

The clarification of Navarro’s comment benefited some currencies, but harmed others to some extent. As the price of the euro rises, along with the value of the Australian dollar, the yen is unable to follow the same path.

Lee Hardman, a currency analyst at Mitsubishi UFJ Financial Group, elaborates on Trump’s position and the market outlook:

„We expect that the consequences will be limited and that President Trump will remain committed to the first phase of the trade agreement in the run-up to the election (…) However, the price activity that occurred indicates that the foreign exchange market remains sensitive to political uncertainty