The latest release on business growth in the single currency remained soft for the previous month, showing undoubted evidence that the strong expansion at the beginning of the year has already lost its pace. Also, ultra-loose monetary policy rate left unchanged by the European Central Bank on Thursday is pushing companies still cut its prices in May, as they have done for at least five years. Meanwhile, the Euro zone services PMI advanced to 53.3 from 53.1 reported in the preceding month and the composite went up to 53.1 from 52.9. The following data shows, that services reading improved slightly over the month, and continue to show its amelioration, versus a slight deceleration suggested by the initial numbers. In the meantime, national EU data was mixed. The Italian services PMI returned back into contraction phase at just 49.8 while the overall composite Italian PMI is hardly holding above the major line at 50.8 is worrying. The French readings also were revised down, however, German and Euro zone data, in turn, were revised higher. Overall, high uncertainty and gloomy forecasts remains on the market, while additional disappointing releases could lead to the additional concerns over the ECB's failure to announce new measures.
The United Kingdom May services purchasing managers' index rose more than expected, rebounding from a three-year low in April, which signalled increasing optimism over the health of the British economy. A report of market research group Markit showed that the situation with UK services PMI was more upbeat than expected with 53.5 points growth from 52.3 in April, while economists had forecast a score of 52.5. Activity has risen every month since January 2013 and the latest rate of growth was the slowed seen over the past three years. Services make up for almost 80% of the total gross domestic product, data showed, and this were the good news from the biggest sector in the UK despite the upcoming EU Referendum. Moreover, data remained well above the 50-point mark, indicating an expanding economy. Expectations for activity over the next 12 months strengthened despite the slowest gain in new business in the current 41-month sequence, and were contingent on the outcome of the June 23 EU membership referendum Nevertheless, despite the better-than-expected PMI figure, research group Markit has warned markets of a possible surprise following the June 23 Brexit referendum on the UK's membership in the European Union. Markit also highlighted that it was the slowest gain in new business in the 41-month growth sequence and that hiring was at a 33-month low.
Upcoming fundamentals: European Central Bank's and Federal Reserve speakers
EUR/USD surges on US data on Friday
Daily chart: The European currency appreciated in moment's notice against the Greenback, as US Non-Farm Employment Change data was published. Since the employment was expected by various experts to increase by around 160,000, but turned out to be a 38,000 change, the Euro surged from 1.1150 to 1.1367 at the end of day's trading session. In addition it has not rebounded on Monday and is trading around the monthly S2 at 1.1342, which indicates at possible continuation of appreciation of the currency pair.SWFX sentiment stays bearish
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade at 1.12 by August
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 6 and June 6 expect, on average, the currency pair around 1.12 by the end of August. Though 51% (-2%) of participants believe the exchange rate will be generally below 1.12 in ninety days, with 32% (+1%) alone seeing it below 1.08. Alongside, only 25% (-1%) of those surveyed reckon the price will trade in the range between 1.12 and 1.18 on August 31.