FX.co ★ Euro Cuts Losses as Investors Digest Key Data

The euro trimmed earlier losses to trade close to the $1.13 mark, hovering near a two-week high, as market participants analyzed a barrage of economic data and its potential effects on the European Central Bank's monetary policy outlook. Notably, Germany's Ifo Business Climate Index increased to 87.5 in May, reaching its highest level since June 2024 and slightly surpassing market predictions of 87.4, indicating a reduction in recent uncertainties faced by companies. However, Purchasing Managers' Index (PMI) data signaled a sharper-than-expected contraction in the Eurozone’s private sector—the most significant in six months—mainly due to a mild decrease in service activities. Production declined in both Germany and France, although the rest of the eurozone displayed stronger performance. Additionally, the dollar remained under pressure amidst concerns regarding the growing US debt, as President Trump's proposed tax legislation is slated for a vote in the House of Representatives later today.