- The EUR/USD exchange rate remained steady around 1.1650 on Thursday as investors processed Eurozone PMI data alongside US employment statistics.
- A new trade framework between the US and EU has emerged, featuring most tariffs capped at 15%, focusing on energy, technology, and investment commitments.
- The number of initial unemployment claims in the US rose to 235,000, marking an eight-week peak and hinting at a weakening labor market.
The Euro (EUR) is showing a steady demeanor against the US dollar (USD) on Thursday, holding around 1.1650 as traders analyze the latest labor data from the US and anticipate new figures on business activity. The price movements are somewhat muted, with investors balancing the more robust fundamentals from the eurozone against lingering concerns about US economic growth.
Euros bolstered by US-EU trade agreements and PMI data
On the European front, sentiment has improved following the announcement of a joint trade framework between the US and the European Union, revealed late Wednesday. The PACT restricts most tariffs to 15%, yet the US’s tariff on automotive imports will remain at 27.5% until reciprocal reductions by the EU are implemented. Under this agreement, the EU has committed to purchasing $750 billion in US energy supplies and $40 billion in AI chips by 2028. The deal also addresses digital trade, regulatory integrity, and sustainability, potentially providing robust support for the euro by enhancing industrial demand and economic relations across the Atlantic.
Further support for the euro came from economic indicators released on Thursday. The Eurozone HCOB Composite PMI for August saw an uptick, rising to 51.1 from July’s 50.9. Manufacturing managed to bounce back to an expansion level of 50.5 after a series of months below 50, although services slightly eased from 51.0 in July to 50.7, yet still remained in positive territory. These figures indicate a slow, ongoing recovery across the region, particularly in the industrial sector.
Jobless claims rise while PMI awaits
In the US, labor market data surprised on the downside. Initial unemployment claims climbed to 235,000 last week, reaching an eight-week high, surpassing the previous week’s 224,000 and the baseline of 225,000. This release adds to the hints that the labor market is gradually deteriorating.
Even with weaker-than-expected labor data, the US Dollar Index (DXY) remains close to 98.34, maintaining a weekly high and reflecting a cautious demand for the dollar. Traders are now looking forward to the release of the S&P Global PMI survey later on Thursday.
