Euro Sinks Against Dollar as Strong US PMI Data Reignites Rate Hike Hopes
The euro slipped against the US dollar on Monday, extending its recent decline as stronger-than-expected US Purchasing Managers' Index (PMI) data provided fresh support for the Greenback.
The latest US PMI readings came in above market expectations, signaling continued expansion in the American services and manufacturing sectors. This data point reinforced the narrative of a resilient US economy, which in turn supports the Federal Reserve's ability to maintain higher interest rates for longer.
A higher interest rate environment typically attracts foreign capital, boosting demand for the US dollar. In contrast, the eurozone's economic data has painted a more cautious picture, with recent PMI figures showing stagnation or contraction, particularly in the manufacturing sector.