EUR: Small pullback – BBH

The euro is trading in a less than a third of a cent range today around where North American dealers left it yesterday and has pulled back a little more than three-quarters of a cent after poking through $1.1900 briefly yesterday while the support is seen near $1.1780, according to analysts at BBH.

Key Quotes

“For all practical purposes, the euro has shrugged off a disappointing PMI report.  The composite for the region slipped to 55.7 from 56.3.  It is the lowest since January.  It averaged 56.6 in Q2.  Germany was a downside surprise.  With the service PMI falling more than the flash reading had suggested, the composite was revised to 54.7 from 55.1 and 56.4 in June.  This is a 10-month low.  Although we find that international comparisons of headline PMI readings not very helpful, it is interesting that for the first time in a dozen years, Germany's composite is below France, Italy, and Spain.  Like Germany, Spain disappointed with a larger than expected pullback from June.  The service PMI fell to 57.6 from 58.5, and the composite eased to 56.7 from 57.1.”

“Italy offered a pleasant upside surprise.  Its service PMI rose to 56.3 from 53.6, and the composite rose to 56.2 from 54.9.  The French service PMI was a little better than the flash at 56.0 (vs. 55.9), but still lower than the 56.9 reading in June.  The composite PMI fell to 55.6 from 56.6 in June.”