A weak German PMI on Tuesday may be enough to cement the euro’s fall below parity

Societe Generale Research maintains a bearish bias on EUR/USD over the coming weeks.

“The week’s big event will be the Jackson Hole Symposium,
with Jay Powell likely to sound resolute, and committed to beating
inflation. Mr Powell speaks on Friday at 3pm UK time so there’s
plenty of time to focus on the meeting, but last week’s rise in global
bond yields, along with last week’s soft Chinese data, sent global
equities into a bit of a funk and gave the dollar a big boost,” SocGen
notes.

“Europe flash PMIs start coming out tomorrow. In
Europe, national surveys have been stronger than the PMI data, which may
give some hope for a stronger figure, but in Germany, gas prices, the
water level in the Rhine and inflation are having a devastating impact
on business confidence. A very bad German PMI might be enough to cement EUR/USD under parity, even if other countries fare better,” SocGen adds.

The consensus on the German manufacturing PMI from Markit is a fall to 48.2 from 49.3. For the eurozone as a whole it’s a decline to 49.0 from 49.8.

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