ForexLive European FX news wrap: Euro slides as PMI data disappoints heavily

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/france-june-flash-services-pmi-480-vs-520-expected-20230623/">France June flash services PMI 48.0 vs 52.0 expected</a></li><li><a href="https://www.forexlive.com/news/germany-june-flash-services-pmi-541-vs-562-expected-20230623/">Germany June flash services PMI 54.1 vs 56.2 expected</a></li><li><a href="https://www.forexlive.com/news/eurozone-june-flash-services-pmi-524-vs-545-expected-20230623/">Eurozone June flash services PMI 52.4 vs 54.5 expected</a></li><li><a href="https://www.forexlive.com/news/uk-june-flash-services-pmi-537-vs-548-expected-20230623/">UK June flash services PMI 53.7 vs 54.8 expected</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-de-cos-we-will-hike-rates-again-in-july-not-possible-to-say-what-comes-after-that-20230623/">ECB's de Cos: We will hike rates again in July, not possible to say what comes after that</a></li><li><a href="https://www.forexlive.com/news/japan-finance-minister-says-firmly-watching-fx-moves-20230623/">Japan finance minister says firmly watching FX moves</a></li><li><a href="https://www.forexlive.com/news/uk-may-retail-sales-03-vs-02-mm-expected-20230623/">UK May retail sales +0.3% vs -0.2% m/m expected</a></li></ul><p>Markets:</p><ul><li>USD leads, AUD lags on the day</li><li>European equities lower; S&amp;P 500 futures down 0.4%</li><li>US 10-year yields down 6.2 bps to 3.736%</li><li>Gold up 0.3% to $1,918.66</li><li>WTI crude down 1.4% to $68.53</li><li>Bitcoin down 0.3% to $30,079</li></ul><p>The risk mood in markets was already leaning towards the softer side earlier today but the sentiment worsened after a rather disappointing set of PMI data from Europe.</p><p>In particular, there was a stark drop in French services activity and that alongside softer numbers in Germany is leading the euro area economy to stagnation towards the end of Q2.</p><p>The miss on estimates has reignited recession fears in the region and we saw yields fall as a result, with traders getting a little less certain about a September rate hike by the ECB.</p><p>EUR/USD fell from 1.0920 to a low of 1.0845 as sellers take charge, with the pair now down 0.8% on the day at around 1.0870. USD/JPY was also briefly dragged down by lower yields to 142.80 but has bounced back to 143.20 as the dollar holds firmer across the board.</p><p>Commodity currencies remain the laggard though as risk aversion takes hold with European equities and US futures keeping lower, alongside the bid in bonds after the PMI data.</p><p>USD/CAD is up 0.4% to retest the 1.3200 mark while AUD/USD is keeping 1% down on the day at around 0.6690, not much changed after the drop in Asia trading.</p><p>It's now over to Wall Street to see if the risk-off wave will continue or if tech shares can pull off another bounce to wrap up the week.</p>

This article was written by Justin Low at www.forexlive.com.