EUR/USD has posted slight gains in the Wednesday session, erasing the losses seen on Tuesday. Currently, the pair is trading at 1.1636, down 0.20% on the day. On the release front, the focus is on services indicators. German Services PMI improved to 54.5, beating the estimate of 53.9. Eurozone Services PMI rose to 55.2, above the forecast of 55.o points. U.S banks and stock markets are closed for the Fourth of July, so we’re unlikely to see much movement from EUR/USD. On Thursday, Germany releases Factory Orders. The U.S will release key employment data and the FOMC will release the minutes of the June policy meeting.
Investors are keeping an eye on the FOMC minutes from the June meeting, which will be published on Thursday. The minutes could be a market-mover, as the Federal Reserve raised rates at the meeting for the second time this year. How many more hikes will we see in 2018? Policymakers appear split between three and four moves, as the U.S economy is booming, but the threat from escalating trade tensions has the Fed concerned. Investors will be looking for clues from the minutes as to Fed monetary policy in the second half of 2018.
German and eurozone manufacturing PMIs in June pointed to expansion. However, the indicators also continued a troubling downward trend, as the both PMIs have dropped for six straight months, raising concerns among investors about the strength of the eurozone economy. Recent trade tensions are threatening to hamper the eurozone export sector, which in turn could weigh on manufacturing output. This has put the spotlight on German and eurozone manufacturing PMIs, which are bellwethers of the strength of the manufacturing sector. Germany, the locomotive of the eurozone, produced soft consumer numbers last week. Retail Sales plunged 2.1%, its steepest decline in 2018. As well, Preliminary CPI fell to 0.1%, down from 0.5% a month earlier.
