Euro sink to a fresh two-month low

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The euro is at a new session low, down 83 pips to 1.0651. The pair had attempted to find support at the early-European low of 1.0660 and bounced from there but the selling resumed in the last 20 minutes.

Month-end flows have been a factor this week but the economic data largely tells the story.

Today’s German CPI reading for May was 6.1% y/y compared to 6.5% expected. In the US, JOLTS job openings unexpectedly rose to 10.1m versus 9.38m expected. There is considerably more labor slack in Europe compared to the US and that may limit ECB hikes and lead to earlier cuts. Meanwhile, the US economy continues to hold up better than anticipated.

If that trend holds, the euro will soon be challenging the January-March double bottom. A big factor in that will be the FOMC decision on June 14 and the US CPI report a day before.