Euro Stuck Below $1.14 Despite Strong Eurozone PMI Data
The euro has failed to break above the crucial resistance level of $1.1400 despite strong Eurozone Purchasing Managers' Index (PMI) data released on Tuesday.
The PMI rose to 51.2 in February, beating expectations and marking the first expansion in business activity since mid-2023. The services sector drove the improvement, but manufacturing remained in contraction territory at 47.1.
US dollar strength and monetary policy divergence between the Federal Reserve and European Central Bank (ECB) are limiting euro upside. Markets have priced out rate cuts for the first half of 2025, with Fed officials emphasizing a cautious approach to easing.
The ECB is expected to begin cutting rates in June as inflation slows more rapidly than in the US. Political uncertainty in several Eurozone member states adds to the cautionary tone.