Date: 23th June 2025.
The USD Benefits From Middle East Escalations
UK and European Purchasing Managers’ Indexes have been made publicly available but so far are not supporting either currency. So far, the best-performing currency is the US Dollar. The US will release its own PMI report at 13:45 GMT+0. The price of the US Dollar continues to witness the impact of the hawkish Federal Reserve and new escalations within the Middle East.
UK and EU PMI Data
The European PMI reports were the first to be made public. Both French PMI reports fell below expectations and below the previous month’s release. Particularly investors were concerned with the Manufacturing PMI which fell from 49.8 to 47.8. The German Manufacturing PMI read as expected while the Services PMI rose to a 2-month high.
A similar story for the UK, Manufacturing PMI data read higher than expectations while the Services PMI read as expected. However, the Great British Pound index still fell in value despite the report. In addition to this, the Pound also continues to remain under pressure from the Bank of England which held its interest rate at 4.25%, supported by six of the nine governing board members, in response to improved trading conditions following the agreement with the US. The Euro Index is currently trading at 0.56% lower and the Pound at 0.63%.
The Bank of England Governor’s speech tomorrow afternoon, along with Thursday’s address, will play a major role in driving the British Pound. Meanwhile, the Euro will see limited releases, with the German IFO Business Climate standing out as the key focus.
US Dollar And Middle East Escalation
The best-performing currency of the day is the US Dollar which is currently trading 0.69% higher so far today. The first reaction of the US Dollar after the US bombing of Fordow, Natanz and Isfahan was a downward price movement, however, the market since then has significantly risen in value. The US Dollar is currently trading at its highest price on June 11th.
The US Dollar strengthened as geopolitical tensions escalated after US strikes on Iranian nuclear sites triggering a lower risk appetite. However, traders will be closely monitoring the release of the US Manufacturing and Services PMI. Investors expect both PMI reports to be slightly weaker than the previous month, however, this cannot be certain until the release is made public.
EURUSD - Technical Analysis
EURUSD 2-Hour Chart
The EURUSD is currently trading below the 75-period EMA and is currently forming a descending triangle pattern on the 2-hour chart. The descending triangle pattern is known to provide a bearish bias as it trades below the 75-period EMA. However, the price is also trading at the support level. On smaller timeframes, the price continues to trade below the 200-period SMA but is retracing higher. However, the retracement is unable to maintain momentum and is forming lower highs.
Key Price Takeaways:
* USD leads as geopolitical tensions and Fed hawkishness boost demand; up 0.69% today.
* UK and EU PMIs failed to support GBP and EUR despite some stronger readings.
* BoE and ECB speeches/data remain key drivers; markets await US PMI release.
* EUR/USD shows bearish signals, trading below key EMAs in a descending triangle.
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Please note that times displayed based on local time zone and are from time of writing this report.
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Michalis Efthymiou
HFMarkets
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