EUR/USD has ticked lower on Tuesday. Currently, the pair is trading at 1.1205, down 0.08% on the day. On the release front, the sole eurozone event is PPI, which dipped to 0.1%, shy of the estimate of 0.2%. In the U.S., core durable goods orders is expected to improve to 0.3%, while durable goods orders is forecast to plunge 1.1%. On Wednesday, Germany and the eurozone post services PMIs, and the eurozone releases retail sales. The U.S. will publish ISM Non-Manufacturing PMI and ADP nonfarm payrolls.
The global trading war has dampened economic activity, weighing on manufacturing sectors across the world. Germany and the eurozone have also been hit, in particular the German automotive industry. It came as no surprise that German and eurozone manufacturing PMIs disappointed in March, with readings pointing to contraction. The German reading dropped to 44.1, losing ground for an eighth straight month. This reading was the lowest since 2012. The all-eurozone release has also been steadily falling, pointing to weakness in the manufacturing sector.
The euro held its own on Monday, ignoring the weak manufacturing numbers. Meanwhile, there was better news out of China’s manufacturing industry. Chinese Caixin Manufacturing PMI didn’t sparkle, but improved to 50.8 and easily beat the estimate of 50.1 points. Investors cheered as the indicator climbed to an 8-month high, after posting three successive releases indicating contraction. The Chinese economy has been hit hard by the trade war with the U.S., and a piece of good news was enough to raise the confidence levels of investors.