EUR/USD Slides Below 1.0850 Amid Disappointing German and EU PMI Data

The EUR/USD currency pair found itself under a wave of bearish pressure, sinking below the critical 1.0850 mark in response to disappointing PMI data from Germany and the European Union (EU). The latest figures revealed a dip in Services PMI below the 50-point threshold for August, signifying contraction within the sector and casting a significant shadow on the Euro’s performance. As market attention shifts, all eyes are on upcoming US PMI readings.

Amidst the unfolding scenario, EUR/USD attempted a modest recovery during the early hours of Wednesday’s European session. However, this upward momentum was short-lived, as the currency pair once again succumbed to bearish forces, descending to its lowest level since June 15, hovering around the 1.0800 range.

In Germany, the HCOB Services PMI dropped below the crucial 50 level for the first time this year in August. This contraction in business activity within the services sector added to the prevailing downward pressure on the Euro. While the HCOB Manufacturing PMI displayed a minor uptick to 39.1 from 38.8 in July, this uptick failed to alleviate the selling pressure weighing on the Euro.

In parallel, the HCOB Services PMI for the broader Eurozone followed a similar trajectory, falling from 50.9 in the prior period to 48.3 for the same time frame. This dual contraction in both Germany and the Eurozone services sectors underscores the challenges faced by the region.

As the market absorbs these developments, all eyes turn toward forthcoming US PMI data. This data will likely shape the short-term trajectory of the EUR/USD pair, while the broader narrative continues to be influenced by global economic dynamics and central bank policies.