EUR/USD: Traders await Purchasing Manager data

EUR/USD could potentially experience volatility after the release of HCOB PMIs for the Eurozone followed by S&P Global PMIs for America, during the US session. 

The HCOB Composite PMI for the Eurozone is forecast to rise to 50.8 from 50.3 in March, the HCOB Manufacturing PMI to 46.5 from 46.1 and the HCOB Services PMI to 51.8 from 51.5. 

The S&P Global Manufacturing PMI for the US in April is forecast to rise to 52.0 from 51.9 and Services to 52.0 from 51.7. 

A PMI figure above 50 is indicative of growth in the sector; below 50 contraction. If any of the data show higher-than-expected readings, they could benefit the respective currencies and vice versa for lower-than-forecast results. 

Of particular interest to currency traders will be Services PMIs since sticky inflation in the sector has been a major contributor to inflation, especially in the US. 

Continued high inflation in the US is viewed as likely to keep interest rates relatively elevated in the United States compared to Europe. The expectation of higher borrowing costs for longer in the US has been bolstering the US Dollar (USD) since higher interest rates attract greater capital inflows