Ella 
The U.S. dollar was weak on Wednesday, with EUR/USD hovering around 1.0700.
Eurozone purchasing managers’ indexes for April pointed to good economic recovery momentum.
S&P Global said U.S. business activity continued to expand in April, albeit at a slower pace than in March.
In early trading in Asia on Wednesday, EUR/USD remained above the psychological mark of 1.0700. Weaker-than-expected U.S. PMI data for April dragged the dollar lower and “buoyed” EUR/USD. Investors will get further clues from Germany’s IFO business sentiment index and expectations, as well as U.S. durable goods orders for March.
Overall euro zone business activity expanded at the fastest pace in almost a year in April, according to the latest Purchasing Managers Index (PMI) survey from Hamburg Commerzbank on Tuesday, with the bloc’s main services sector posting a strong rebound. The Hamburg Commerzbank euro zone composite PMI rose to 51.4 in April from 50.3 in March, better than expectations for 50.8. The reading hit the highest level in nine months.
Meanwhile, the euro zone services PMI hit an 11-month high, rising to 52.9 in April from 51.5 in March, better than market expectations of 51.8. The Eurozone manufacturing PMI came in at 45.6 in April and 46.1 in March, below expectations of 46.5. EUR/USD attracted some buyers after the data was released. However, the ECB’s dovish stance may limit EUR/USD gains.
European Central Bank policymakers have stressed the need for multiple interest rate cuts this year, even as rising U.S. inflation delays the Fed’s shift to easing policy and tensions in the Middle East keep oil prices high. The European Central Bank may cut its record deposit rate of 4% in June but remains open to further action, President Christine Lagarde said.
On Tuesday, the preliminary reading of the U.S. S&P Global Composite Purchasing Managers’ Index, which tracks the manufacturing and services sectors, fell to 50.9 in April from the previous reading of 52.1. At the same time, the manufacturing purchasing managers index fell to 49.9 in April from the previous value of 51.9, which was lower than the expected value of 52.0. The services purchasing managers index fell to 50.9 from the previous value of 51.7, which was lower than the expected value of 52.0. Reports showed U.S. business activity continued to expand in April, albeit at a slower pace than in March. Dismal U.S. economic data weighed on the dollar and limited the upside for EUR/USD.
