Euro FX Futures (6E) edged lower early Friday in the New York session despite preliminary private sector activity reading for February coming in stronger than expected.
The euro was lower against the U.S. dollar and the U.K. pound, while it firmed up safe-haven currencies such as the Japanese Yen and the Swiss franc.
Factory Surge Lifts Eurozone: The Hamburg Commercial Bank (HCOB) composite purchasing managers’ index (PMI) edged up 0.6 points to a three-month high of 51.9, flash estimate released by S&P Global showed. Economists had braced for a more modest improvement to 51.5. The Eurozone's private sector has been expanding for 14 consecutive months.
Source: S&P Global
Manufacturing activity accelerated to a 44-month high, with the corresponding PMI improving 1.3 points to 50.8, exceeding the consensus estimate of 49.9.
Source: S&P Global
The service sector also experienced expansion, although the rate of growth was slower than expected. The HCOB Services PMI edged up 0.2 points to 51.8 but was a tad lower than the 51.9 consensus.
In the manufacturing sector, production rose at the fastest pace since Aug. 2025 and the upturn in overall new orders remained unchanged from January. The rate of input cost inflation quickened for a fourth straight month, while output charges rose at a slightly slower pace than in January.
What Economists Say: Commenting on the flash PMI data, HCOB Chief Economist Dr. Cyrus de la Rubia said,”It might be premature, but this could be the turning point for the manufacturing sector as the headline PMI increased to growth territory.”
“Overall, it seems that the manufacturing sector is on a more stable footing and could contribute to overall growth this year instead of being a drag for the economy.”
The economist noted that pricing pressure in the services sector, which is monitored by the European Central Bank tightly, although elevated, has relaxed a bit in February.
“Given the stable expansion of economic activity and a still elevated service inflation the
ECB does not seem to be inclined to change its view to stay put with respect to their key policy rate,” de la Rubia said.
ING economists also flagged the prevalence of pricing pressure but cheered the positive implications for growth. “Overall, at the end of a week that was dominated by the aftermath of last week’s informal European summit and this week’s rumours of a possible early exit for Christine Lagarde from the ECB, this morning’s PMI readings bring back some economic normality,” they said.
ING stated that the eurozone economy is gaining momentum, leaving the geopolitical tensions of the past behind – at least for now, thanks to a rebound in German manufacturing. The HCOB flash German manufacturing PMI climbed 1.6 points to 50.7, also marking a 44-month high.
Implications for Forex Futures: Futures traders could view the upbeat composite PMI surprise and manufacturing rebound as near-term supportive for Euro FX (6E) on dips, especially if U.S. data softens later in the session. However, persistent services inflation and expectations that the ECB stays cautious on rate cuts may limit upside momentum.
Source: TradingView
A tactical strategy could involve buying pullbacks toward intraday support with tight stops below the session low. Alternatively, selling into strength near key resistance may suit short-term traders if dollar strength reasserts itself.
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