EUR/USD falls below 0.9920 on positive US data

The EUR/USD pair has collapsed by 1% after upbeat US economic data. The pair breaks below parity, extending its losses after hitting on Wednesday a weekly high at 1.0079.

Better than expected US S&P Global and ISM Manufacturing PMI further support Fed’s rate hiking stance and even a jumbo 75 bps rate hike in the FOMC September meeting.

On Thursday, the pair opened near the highs of the day at 1.0050s but later on, dived below the parity level on the release of positive US economic data, which has somewhat eased recession-linked concerns. Consequently, the EUR/USD trades around the day’s lows at 0.9910s, below its opening price.

Risk aversion keeps global shares declining. The August’s US ISM Manufacturing reading is aligned with July’s figure at 52.8, topping the street’s estimates of 51.9- Even though the data was positive, it is the second lowest reading since June 2020.