Euro remains near seven-week highs after downwardly revised Eurozone Manufacturing PMI

The Euro (EUR) reached near seven-week highs on Monday, hovering around the 1.1556 mark, as revised Eurozone Manufacturing PMI figures revealed a moderate expansion in July. Initial Eurozone PMI data indicated a moderate increase in sector activity, while hopes of renewed peace talks between the US and Iran bolstered the Euro. The Eurozone’s HCOB Manufacturing PMI has been adjusted downward to 51.9 from an earlier estimate of 52.0 in July.

This represents a moderate improvement compared to June's 51.4 and marks the best performance since April, indicating resilience among Eurozone factories despite energy shocks and Iran's war uncertainties. Spain and Italy's HCOB Manufacturing PMIs also showed moderate growth in July, though below market expectations. German manufacturing PMI experienced a significant improvement, while French manufacturing activity fell short of forecasts.

German retail sales decreased by 1.1% in June, surpassing the 0.5% decline predicted by analysts, primarily due to a 2.1% rise in petrol station sales. These figures follow a 1.2% increase in May. Additionally, a moderate risk-on mood and lower oil prices provided some support to the Euro, as hostilities in the Middle East subsided, and US President Donald Trump announced that negotiations with Tehran would commence on Monday.

However, Iran's Foreign Ministry Spokesperson denied any talks with the US concerning Hormuz, a crucial sea lane for global crude supplies. Despite the Eurozone's positive manufacturing data, analysts at ING doubt that such news will have a lasting impact on the EUR/USD pair. The primary driver of the EUR/USD trend, according to ING experts, is the Federal Reserve's September decision, with US data this week determining whether the pair will reach the 1.1615/20 resistance or drop below the 1.15 level.