DAX Rises, EUR/USD Slips as Euro Mfg. Firms Despite Tariffs, Services Dip
While the DAX stock index ended 3% up, the euro came under pressure as services fall, while manufacturing holds despite the tariff talk.
Quick overview
- The DAX stock index closed 3% higher, reflecting renewed optimism in equity markets amid positive trade talk sentiment.
- The euro faced pressure due to weak economic data, with the EUR/USD pair dropping to 1.1307 after a bullish run.
- Manufacturing PMI data from the Eurozone and Germany showed slight improvements, suggesting potential stabilization in the sector.
- Despite recent euro gains, the dollar's resurgence and ongoing economic uncertainties may lead to cautious trading in the near future.
While the DAX stock index ended 3% up, the euro came under pressure as services fall, while manufacturing holds despite the tariff talk.
DAX Opened Higher Amid Renewed Risk Appetite
Equity markets found fresh support yesterday, with Germany’s DAX closing higher on broad-based optimism. Renewed confidence in trade talks and global economic stability helped boost sentiment, even as currency markets showed signs of volatility.
DAX 40 Chart Daily – Returning to the Highs
Dax40 opened with a bullish gap today at 21,801 points and continuing climbing, closing the day at 21,961 points, accounting for a 3.19% gain including the gap.
Dollar Reclaims Ground After Tariff Uncertainty
The U.S. dollar, which had weakened earlier due to easing expectations and tariff-related concerns, staged a strong comeback. In late 2024 and early 2025, speculation around potential new tariffs had boosted demand for the dollar, driving the EUR/USD pair all the way down to parity.
EUR/USD Pulls Back After Bullish Run
Despite the European Central Bank’s dovish rate cut, the euro had been on a steady rise, climbing above 1.1570 as the market priced in U.S. weakness tied to trade tensions. However, that bullish momentum faltered yesterday with a sharp 2.5-cent drop, pushing EUR/USD back to 1.1307 and suggesting the rally may be pausing.
Economic Data Weighs on Euro
Today’s manufacturing data from the Eurozone and broader Europe added further pressure to the single currency. With the region still feeling the economic aftershocks of the post-COVID recession that began in 2020, weak PMI figures may be dampening investor enthusiasm and reinforcing doubts about sustained euro strength.
European Manufacturing PMI – April Snapshot & Analysis
Eurozone Manufacturing PMI (April):
- Came in at 48.7, slightly above expectations of 47.5
- March’s final figure was 48.6, indicating a modest improvement month-over-month
Germany – Manufacturing PMI (April):
- Recorded at 48.0, beating forecasts of 47.6
- A slight rise from March’s 48.3, though still below the neutral 50 level
Conclusion:
The April manufacturing PMI data from the Eurozone and Germany beat expectations and showed marginal improvement from March, suggesting that the sector may be stabilizing after prolonged weakness. While still in contraction territory, the slower rate of decline offers a cautiously optimistic signal for European industry. Investors and policymakers alike will be watching to see if this momentum can build into the second half of the year.
Although recent gains in the euro were supported by a weaker dollar and shifting policy expectations, the latest pullback in EUR/USD reflects a market recalibration. With the dollar showing resilience and Eurozone data remaining tepid, traders may now look for confirmation of trend direction in upcoming economic releases and central bank commentary.
EUR/USD Live Chart
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