Fed’s Powell opens door to potential rate cuts at Jackson Hole
The euro held slightly higher against the US dollar after fresh survey data showed the eurozone economy expanding faster than expected in August.
The composite purchasing managers’ index (PMI), which tracks both manufacturing and services, rose to 51.5 in August from 50.9 in July. Economists surveyed by the Wall Street Journal had expected a reading of 50.7.
Stronger-than-expected PMI readings in both France and Germany earlier in the day helped the euro recover from its initial losses. The survey indicated that economic activity has accelerated modestly over the past three months, signaling a more stable footing for the eurozone economy despite lingering uncertainties.
The euro was last trading at $1.1653, only marginally higher on the day, suggesting that while the data gave some support, traders remain cautious about the broader outlook.
The stronger PMI signals resilience in Europe’s largest economies, but the currency reaction has been muted. This reflects broader market concerns about global growth and expectations for Federal Reserve rate cuts later this year. Unless European growth momentum strengthens further, the euro may struggle to build a sustained rally against the US dollar.