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23/05/24
159
USD Cuts Loss Versus EUR As May Business Activity in US Quickens
On Thursday, the US dollar trimmed losses versus the euro after data showed U.S. business activity in May accelerated to its highest level in just more than 2 years, indicating that economic growth increased halfway through Q2.
According to S&P Global, its flash U.S. Composite PMI Output Index, which tracks the services and manufacturing sectors, surged to 54.4 in May. That was the highest since April 2022 and follows April’s final reading of 51.3.
Thursday data also showed the number of Americans filing initial claims for unemployment benefits last week dropped, indicating underlying strength in the labor market that will likely continue supporting the economy.
At their last policy meeting, Federal Reserve officials said they were still hopeful that price pressures would ease slowly in the next few months, but there were doubts about whether current interest rates were high enough to guarantee that outcome. Several officials would be willing to hike rates again if inflation rose.
The euro was 0.1% higher at $1.0835. The currency rose to $1.0861 earlier in the day after the preliminary composite Purchasing Managers’ Index for the eurozone was higher than the 50 level separating contraction from growth for the third straight month, while even struggling manufacturing showed a recovery.
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