The euro is higher against the US dollar on Friday.
- Eurozone economic data missed expectations, pulls euro to 1-week low
- Lack of Brexit progress weighed on European currencies
- American home sales jumped by a quarter in one month
- US economic activity spiked in August
EUR/USD was down by 93 pips (-0.78%) to 1.1766 as of 5pm GMT. The euro-dollar exchange rate is lower by -0.64% this week.
The currency pair dropped over 100-pips from high to low, finding a low point above 1.175 by the afternoon.
EUR: Eurozone data pulls euro to 1-week low
Apart from a small bright spot in German manufacturing, Eurozone PMIs were a sea of disappointments in flash readings for August. The weaker economic data caught economists by surprise who had mostly expected activity to expand. The weaker surveys from purchasing managers in August are in concert with new outbreaks in many European countries, including the biggest economies France, Germany and Spain.
The flash Eurozone composite PMI for August came in at 51.6 when a reading much higher at 54.9 had been anticipated. For the EUR/USD exchange rate, the weak PMI data from Europe contrasted with universally solid economic data from the United States, including PMIs.
Although more an issue for the UK and the pound, the lack of progress with its biggest trading pattern the United Kingdom on a deal, added to the bearish sentiment towards the euro.
USD: Dollar extends rebound into the weekend
Having paused on Thursday, the dollar was again showing some renewed strength on Friday. Better economic data contrasted with the Fed’s grim outlook on the economy, but matched the Fed’s reluctance to announce any new policy stimulus.
The dollar jumped following much better than expected flash August US services and manufacturing data, then extended the rally after home sales rose by a record amount and house prices hit a new record high in July.
The August manufacturing PMI hit 53.6, when 51.9 had been expected and up significantly from the 50.9 reading in July. The services PMI was equally impressive rising to 54.8 when 51 was expected and well above the 50 prior.
