- EUR/USD falls further after early Asian slide.
- China’s service sector PMI beats estimates.
- Data inspires Asian stocks; euro ignores the optimism.
The dollar bears are not jumping to push down the greenback even after a better-than-expected China Caixin Services PMI signalled a continued recovery in China and a strong showing in the Asian equities.
Continuous four-month expansion in China’s service sector was belied by the headline numbers in the index, which came in at 54.00 in August from 54.1 in July, the actual recovery, especially on the job front, was much more robust.
The better showing helped Japan’s Nikkei and the Shanghai Composite to trade in the green on Thursday.
A risk-on mood usually pushes the dollar into the red: evident in the recent months’ decline in the greenback after the V-shaped recovery in the US stocks to a record high from the coronavirus lows. The dollar index had fallen from 102.99 to 92.75 as the equity rally started in earnest since the March lows.
The dollar is resilient on Thursday and is keeping the EUR/USD down; the pair has fallen by 0.239 to trade at 1.1821 today.
Analysts sense that the corrective pressures are allowing the greenback to stay afloat. EUR/USD might also be under pressure due to the euro weakness after the negative Eurozone inflation.
Today, the economic docket has final German, and Eurozone PMI readings – a significant downward revision from the preliminary numbers would put EUR/USD under pressure. Traders would also watch July Eurozone Retail Sales and the US Trade Balance.