Market players are now lowering expectations for an interest rate hike from the European Central Bank (ECB) after being hit by disappointing European Zone manufacturing and services PMI data.
Economic activity in Europe’s two largest economies recorded a significant slowdown in growth in June, with the German manufacturing sector reportedly declining to its lowest level in nearly two years.
This sparked concerns over the possibility of a recession that could affect the ECB’s plans to begin a phase of tightening its monetary policy in July.
Following the publication of this data, the euro depreciated 0.6% against the US dollar, slipping slightly below the 1.0500 price in the European session.
Meanwhile, Germany entered phase 2 of its three -stage emergency gas plan on Thursday after the government saw high risks in long -term gas supply shortages.
Meanwhile, the pound weakened slightly following the reading of UK manufacturing and services PMI data which did not show much change in economic activity in the country in June.
In addition, investors also saw a rebound of the US dollar in the European session which traded higher than its major rivals.
