FX.co ★ Euro Slightly Below $1.18 Amid Mixed PMI Data and ECB Outlook

The euro slightly declined, now trading just below $1.18, as investors processed mixed PMI data and assessed potential consequences for the European Central Bank (ECB)’s policy direction. The HCOB Eurozone Composite Purchasing Managers' Index (PMI) modestly increased to 51.2 in September, aligning closely with the predicted 51.1, and marking the most rapid expansion in the region’s private sector in 16 months. Growth in the services sector exceeded expectations, while the manufacturing sector slipped back into contraction, not meeting forecasts. On a country-specific basis, French data fell short, whereas German data surpassed expectations. The ECB has recently suggested the possibility of an end to the rate-cutting cycle, due to ongoing inflation risks associated with tariffs, services, food prices, and fiscal measures. The focus now shifts to upcoming speeches from ECB and Federal Reserve officials for additional insights.