The EUR/USD exchange rate returned some gains on Tuesday, July 3, 2023, as eurozone PMI data underwhelmed. The eurozone composite PMI fell to 52.1 in June from 54.8 in May, missing expectations for a reading of 53.5. The manufacturing PMI also fell, to 52.0 from 54.6 in May.
The weak PMI data weighed on the euro initially, but the currency recovered some ground as investors weighed the data against the ongoing hawkish stance of the European Central Bank (ECB). The ECB is expected to raise interest rates by 25 basis points at its meeting next week, and it could signal more hikes to come in the coming months.
The EUR/USD is currently trading at $1.0925, up 0.2% on the day. The currency pair is facing resistance at $1.0950 and $1.1000. Support is seen at $1.0850 and $1.0800.
The outlook for the EUR/USD is mixed. The weak PMI data could weigh on the currency in the near term, but the hawkish stance of the ECB could support the euro in the longer term.
Here are some factors that could influence the EUR/USD exchange rate in the coming days:
* The release of US economic data, including the June jobs report and the July consumer price index (CPI).
* The minutes of the Federal Open Market Committee (FOMC) meeting held on June 14-15.
* The outcome of the ECB meeting on July 7.
* The risk appetite of investors.
Overall, the EUR/USD is expected to remain volatile in the near term. The currency pair could see some gains if the ECB continues to raise interest rates and if the eurozone economy shows signs of resilience. However, the EUR/USD could also see some losses if the eurozone PMI data continues to disappoint and if the global economy weakens.