The
euro managed to recover significantly during trading today’s trading session, set
for ad second straight daily gain, recording its highest level in nearly a week
against the dollar, after data that showed the contraction of the euro zone
economy eased this month.
At
08:49 GMT, the EUR/USD pair traded at 1.1283 after it opened today at 1.1252, where
it recorded the highest level in a week at 1.1305.
Eurozone
flash purchasing managers index figures, measuring the performance of the manufacturing
and the services sectors, showed an ease in contraction, in light of the return
of countries to ease the pandemic closure procedures.
The
governments in Europe have eased the procedures for closures and social distancing,
although new cases of the coronavirus, which infected 9 million people
worldwide and have caused half a million deaths, are still recorded.
The
composite PMI from the manufacturing and service sectors for the euro area
during June, which is a good measure of the health of the economy, recovered to
the level of 47.5 after a reading of 31.9 in May, while it had recorded a
historic low in April of 13.6.
It
is worth noting that reading the index above 50 indicates growth in the sector,
while reading below 50 indicates contraction.
Expectations
indicate that the gross domestic product in the euro area is on track to record
an unprecedented recession during the second quarter of the year, but improved
PMI readings signaled that lifting restrictions by European countries will help
end the economic downturn during the second half of the year.
The
Eurozone factory PMI hit 46.9 in June from 39.4 in May, while expectations were
at 43.8. The services gauge recorded 47.3 from a previous of 30.5, compared to expectations
of 40.5.
In
Germany, the economic sectors are still in contraction, as the manufacturing PMI
index recorded 44.6 in June from the previous reading of 36.6, while the
service index registered 45.8 from the previous reading 32.6.
The
French economy showed stronger data as the index was able to return to the
growth zone above the 50 level, where the manufacturing index climbed to 52.1 from
40.6 and the service sector soared to 50.3 from 31.1.
The upbeat PMI data succeeded
in adding more positivity to the sentiment after President Trump quelled fears
about the trade relation with China as he tweeted: “The China Trade Deal is fully intact. Hopefully they will continue to
live up to the terms of the Agreement!”