European session review: EUR strengthens, supported by better than expected Eurozone manufacturing PMI, German retail sales

EUR rose against other major currencies in the European session on Monday, following the release of the better-than-expected Eurozone’s manufacturing PMI print for July and Germany’s retail sales data for June.

Final data from IHS Markit revealed that Eurozone Manufacturing PMI came in at 62.8 in July, marginally firmer than the flash figure of 62.6, but down slightly from June’s record high reading of 63.4. The July final print, however, was the lowest reading since March. Economists had expected the indicator to stay unrevised at 62.6. According to the report, output grew at the softest rate since February, while the rate of expansion in new business was steep and held close to March’s survey record, and new export orders continued to expand at a sharp pace, albeit one that was the weakest in five months. In addition, employment levels rose at a rate unseen in 24 years of data collection. On the price front, input costs and output charges increased at record rates. 

In addition, Destatis reported that retail sales in Germany, the Eurozone’s biggest economy, rose 4.2% m/m in June, following an upwardly revised advance of 4.6% m/m in May. This significantly exceeded economists’ forecast of a 2% m/m gain. In y/y terms, the country’s retail sales surged 6.2% after an upwardly revised 1.8% m/m drop in the previous month.