EURUSD remains under parity and raises a lot of questions.
The major currency pair continues to fall. The current quote for the instrument is 0.9948.
Demand for the “greenback” as a “safe haven” asset is not calming down, and it’s quite clear why: investors are still concerned about the possibility of a global recession. Macroeconomic signals aren’t delightful.
For example, preliminary reports on the US Manufacturing/Services PMIs from Markit weren’t positive. The first indicator dropped to 51.3 points in August after being 52.2 points the month before. The second one went from 47.3 points in July to 44.1 points this month.
In the Euro Area, enterprises are also becoming less active to have enough time to assess the future outlook. The Services PMI showed 50.2 points in August after being 51.2 points the previous month. The Manufacturing PMI dropped to 49.7 points against the July reading of 49.8 points.
Everything is pretty simple: rising inflation, European energy crisis, and a lot of other consequential problems don’t make businesses more optimistic.
The US labour market provides signals hinting at serious problems real estate companies might have in the future. The New Home Sales report showed a 29.1% decline, from 585K in June to 511K in July. The expected reading was 574K.
The data is looking rather sad no matter which way you look at it. In this light, it’s no surprise demand for the USD remains high.
Source: Roboforex
