EUR/USD Under Pressure as France Services PMI Slumps to 5-Month Low

EUR/USD faces headwinds after France's March flash services PMI came in at 48.3, significantly missing the 49.0 consensus and falling from the prior reading of 49.6. The composite PMI also disappointed at 48.3 versus 49.3 expected, marking a five-month low in business activity and signaling deepening contraction in France's services sector at the close of Q1. On a brighter note, France's manufacturing PMI surprised to the upside at 50.2 versus 49.5 expected, crossing back into expansion territory from the prior 50.1. However, the manufacturing beat was insufficient to offset the broader weakness in services, which remains the dominant sector in the French economy. The deteriorating French economic outlook adds to concerns about Eurozone growth momentum and could weigh on ECB policy expectations. Traders should monitor upcoming PMI releases from Germany and the broader Eurozone for confirmation of this softening trend. Near-term, the weak data introduces downside risk for the euro against major counterparts, particularly if other Eurozone economies report similar weakness.