European bourses are lower in early trading as the euro hits a 23-month high against the U.S. dollar, weighing on shares of European exporters: U.K.’s FTSE -0.8%, Germany’s DAX -0.4%, France’s CAC -0.2%.
The U.S. Dollar Index dropped 1.4% last week and is down 1.7% this month after touching its lowest level in more than a year; the index currently is up a bit from earlier lows.
“A weaker dollar seems to be the path of least resistance given the soft data coming out of the U.S. and the political uncertainty,” says Michael Hewson, chief markets strategist at CMC Capital Markets in London.
Also, euro zone economic data indicates slower growth than expected, as the IHS Markit flash purchasing index for July slips to a six-month low.
Analysts say the weaker PMI is unlikely to signal the start of a sharp slowdown, but the slowing pace of growth and easing price pressures suggest the ECB will be in no rush to taper policy.
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