EUR/JPY TRADES WITH LOSSES AFTER MIXED EUROPEAN ECONOMIC DATA

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  • EUR/JPY lost ground on Monday’s session, but managed to remain above 149.00.
  • Eurozone May PMIs were revised lower.
  • The Euro finds support on ECB Lagarde’s hawkish comments.

The EUR/JPY retreated to the 149.70 regions at the start of the week while the Euro traded mixed against its major rivals following disappointing PMIs from the EU (European Union). On the other hand, the Japanese Yen, held strong against most of its rivals as the prospects of Japanese authorities intervening in the markets helps limit deeper losses for the JPY.


EU reported weak PMIs but Lagarde’s comments limit the Euro’s losses

The  S&P Global and Hamburg Commercial Bank (HCOB) showed that de Composite PMI dropped to 52.8 vs the consensus of 53.3 and the preliminary reading of 53.3. In addition, the Services PMI was also revised downwards to 55.1 from 55.9. Other data showed that the Sentix Investor confidence for June, slid to -17 (MoM)  falling short of the -9.2  expected. April’s Producer Price Index (PPI) was confirmed at -3.2% (MoM) matching the consensus.


On the other hand, the European Central Bank (ECB) president, Christine Lagarde's hawkish comments stating that underlying inflationary pressures remain high and there is no clear evidence of inflation peaking, limits the European currency losses. In addition, the euro is supported by rising German yields, indicating market expectations of proactive measures from the ECB to address inflation concerns. In that sense, the 10-year and 2-year bond yields saw more than 3% increases standing at 2.39% and 2.94% respectively


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