By Boluwatife Oshadiya | June 24, 2026
Key Points
- Euro declines to around $1.14, its weakest level against the dollar in 12 months
- Softer June eurozone PMI data highlights continued weakness in manufacturing and services activity
- Stronger dollar demand and weak economic sentiment increase pressure on the single currency
Main Story
The euro weakened to its lowest level in a year on Tuesday, slipping to approximately $1.14 against the U.S. dollar after fresh business activity data showed the eurozone economy remains under pressure.
The currency has lost more than 2% against the dollar over the past month and is down nearly 2% over the last year. Traders pushed the euro below previous support levels after preliminary June Purchasing Managers’ Index (PMI) data indicated slower growth across the bloc.
Eurozone manufacturing PMI eased to 51.3 from 51.6, while services activity remained in contraction territory at 48.9. The composite PMI, which combines manufacturing and services output, remained below the critical 50-point expansion threshold for a third consecutive month, suggesting economic momentum continues to weaken.
Germany and France, the eurozone’s two largest economies, both recorded composite readings below 50, reinforcing concerns about slowing regional growth and reducing investor appetite for the common currency.
Currency analysts noted that a sustained break below the $1.1390 level could open the door for further declines toward $1.1340, while former support around $1.1420 may now serve as resistance.
“The latest PMI figures confirm that the eurozone recovery remains fragile, particularly as business confidence continues to soften across major economies,” said analysts at Hamburg Commercial Bank in their PMI assessment.
The Issues
The euro’s weakness reflects broader concerns about the health of the eurozone economy. While inflation has moderated significantly compared to previous years, growth remains sluggish, forcing investors to reassess expectations for monetary policy and economic recovery.
At the same time, the U.S. dollar continues to benefit from safe-haven demand and relatively stronger economic fundamentals, widening the divergence between the two major currencies.
What’s Being Said
“Business activity across the euro area remains subdued, with demand conditions still challenging despite some easing in inflation pressures,” said economists at Hamburg Commercial Bank.
Independent market analysts noted that weaker PMI readings from Germany and France could increase pressure on policymakers to support economic activity if growth conditions continue to deteriorate.
What’s Next
- Investors will closely monitor upcoming eurozone inflation data for clues on future monetary policy direction.
- Markets are awaiting further signals from the European Central Bank regarding interest rate expectations for the second half of 2026.
- Currency traders will watch whether the euro can hold above the $1.1390 technical support level.
The Bottom Line:
The euro’s slide underscores growing concerns about the eurozone’s economic momentum. Unless growth indicators improve, the single currency could remain under pressure as investors continue to favor the U.S. dollar.
