The euro continued to trade in the shadows of the approved austerity package from the Greek parliament and the unwinding of pessimism remains the main pillar although the rally is losing momentum.
On Thursday the focus was still on the second leg of the vote in Parliament on the austerity measures yet the rally started to lose momentum as the focus shifts to the Sunday finance ministers meeting to see if the tranche will be released as soon as possible and hopes for more news regarding the new bailout.
The upside rally is losing momentum especially after the CPI flash estimate for June remained at 2.7% instead of rising to 2.8%, adding jitters that the ECB might hold back the rate increase as promised last meeting when they announce the decision next week.
We can surely still see the positive outlook evident and the euro to be supported in the coming period, yet on Friday the manufacturing data are all expected to confirm the weakening growth pace and that might increase fluctuations and risk aversion to the dollar’s benefit and end of the week position squaring and that might pressure the pair to the downside.
Germany will start the flow of data at 07:55 GMT with the final June revision to the PMI Manufacturing that is expected to hold at 54.9 after it slowed from May’s 57.7.
The euro area will end the week with the final revision to the PMI Manufacturing for June at 08:00 GMT and expected unrevised at 52.0 after the drop recorded from 54.6 in May. At 09:00 GMT the Unemployment Rate for May is due and expected to remain steady at 9.9%.
The U.S. will also end the week with manufacturing data at 14:00 GMT with the ISM Manufacturing for June which is expected to have eased to 52.0 from 53.5.
Written by ForexMansion.com