HiFX: Foreign Exchange Specialists

• Headlines

June 23, 2008

Confidence within the Eurozone manufacturing and service sectors fell below the key 50.0 mark during the month of June.  High oil prices and falling demand resulted in both the Manufacturing PMI and Services PMI falling to 49.5 and 49.1 respectively, signalling a period of contraction.  This is the first time in over three years that both indicators have fallen below the 50.0 level.  As a consequence of the latest economic releases analysts now feel that the ECB will adopt a one and done attitude towards monetary policy tightening as they surmise that the economy is not strong enough to withstand further tightening.  Overall the Euro dropped nearly 0.6% against the U.S. dollar.