Speaking on the slower performance for the sector last month, Chair of the Institute for Supply Management (ISM) Services Business Survey Committee Anthony Nieves said: The PMI printed at 50.3 versus the expected reading of 52.2. The PMI printed below forecasts, with performance in the sector expanding at a slower pace in May. However, the latest ISM services PMI prompted a pullback in the US Dollar on Monday. The data led to renewed bets on additional policy tightening from the Federal Reserve. USD initially rose in the wake of last week’s strong jobs report. USD ended the day trading in a narrow range against the Euro, however. The US Dollar (USD) firmed in the first half of Monday but shed its gains after evidence of poor performance in the US services sector.Ī return of global risk appetite also weighed on the safe-haven ‘Greenback’. US Dollar (USD) Exchange Rates Lose Ground after Disappointing Services PMI ‘The latest available data suggest that indicators of underlying inflationary pressures remain high and, although some are showing signs of moderation, there is no clear evidence that underlying inflation has peaked.’ Speaking in Frankfurt on Monday, Lagarde said: On the other hand, hawkish comments from ECB President Christine Lagarde limited EUR’s downturn. PPI fell for a seventh consecutive month in April, a decline of 3.2% versus forecasts of a 3.1% fall. Mixed signals regarding the ECB’s forward path also dampened enthusiasm for the single currency.Įurozone PPI figures added to market speculation that inflationary pressure in the trading bloc were easing sooner than expected.
The Euro (EUR) slipped on Monday amid a return of global risk appetite. Euro (EUR) Exchange Rates Fall despite Hawkish Lagarde Comments The exchange rate also found support from evidence of poor performance in the US services sector.Īt time of writing the EUR/USD exchange rate was at around $1.0710, which was virtually unchanged from that morning’s opening figures. On the other hand, hawkish rhetoric from European Central Bank (ECB) President Christine Lagarde underpinned EUR/USD. A return of risk appetite weighed on the pairing as well as a drop in Eurozone PPI. The Euro US Dollar (EUR/USD) exchange rate traded in a narrow range on Monday.
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