The EUR/USD fell further below 1.1000 on Monday, but the dollar’s gains were limited following mixed economic data.
The EUR/USD consolidated at 1.0953 in the New York session, declining 0.3% or 28 pips. The EUR/USD traded within a narrow range of 1.042-1.0996 throughout the session as investors looked ahead to US nonfarm payrolls data later in the week. Initial support for the EUR/USD is likely found at 1.0899. On the upside, the EUR/USD faces immediate resistance at 1.1093.
In economic data, Eurozone manufacturing activity gathered pace in July despite a slumping Greek economy. Markit Group’s final Eurozone manufacturing PMI rose to 52.4 in July from 52.2 the previous month. Economists forecast no change from the June rate.
“The eurozone manufacturing economy showed encouraging resilience in the face of the Greek debt crisis in July,” said Markit chief economist Chris Williamson in a statement. “The PMI held close to its June level, which had been the highest for over a year, coming in ahead of the earlier flash estimate largely on the back of stronger than previously recorded growth in Germany.”
Greece’s PMI indicator plunged to 30.2 in July, a record low, while France contracted for the second consecutive month.
In US data, personal income from all sources rose 0.4% in June following an identical increase the previous month, the Department of Commerce reported on Monday.
Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.2% in June following a downwardly revised increase of 0.7% the previous month. The consumer spending figures were included in last week’s Q2 GDP report, which showed the US economy expanded 2.3% annually between April and June.
Separately, the Institute for Supply Management reported unexpected weakness in US manufacturing activity despite a solid pickup in new orders. ISM’s July manufacturing PMI dipped to 52.7 in July from 53.5 the previous month. A median estimate of economists forecast no change from the previous reading.
Meanwhile, US construction spending was at a five-month low in June as private outlays posted their biggest drop in 12 months. Construction spending rose just 0.1% in June following an upwardly revised gain of 1.8% in May that was originally reported as 0.8%. Economists forecast a June increase of 0.6%.
Mixed economic data restrained the US dollar on Monday. The dollar index, a trade-weighted average of the greenback against six global currencies including the euro, rose 0.1% to 97.48.
Based out of Toronto, Canada, Husni Sam Borji is senior macroeconomics analysts who contributes regularly to TradersDNA, where he examines the global financial markets. Husni Sam has authored dozens of government reports and industry whitepapers, as well as thousands of financial articles. Husni Sam holds a BA from the University of Windsor and a Master’s degree in Economic Public Policy from McMaster University.
His expertise includes macroeconomics, fundamental analysis, industry research and global political economy.