On Thursday, the EURO was slightly higher and EUR/USD traded at about 1.0863, up 0.22% for the day in the North American session.
Germany posted more weak data this week. Once the powerhouse of Europe, Germany’s economy has battled and earned the label Europe’s sick man.
In July, the Ifo Business Climate index eased on increasing pessimism about the economy’s health. The index fell to 87 from 88.6, lower than the 88.9 market estimate and the lowest since Feb.
According to Clemens Fuest, Ifo’s president, the report indicated that the German economy was stuck in a crisis.
The PMI reports this week were weaker than expected, as manufacturing has been contracting for two years. Although the services sector is growing, the 52.0 reading for July was the lowest since services managed to move back into growth.
The soft data will raise concerns about the modest rebound in the eurozone and support the narrative for more rate cuts from the European Central Bank.
Economic growth in the US was stronger than expected in Q2. GDP rose 2.8% y/y, twice the 1.4% rate in Q1 and much higher than the 2.0% forecast. A rise in consumer spending mainly caused the strong gain. The PCE price index eased down from 3.4% in Q1 to 2.6%.
