Foreign Exchange Market Update

June 23, 2026

Eurozone Private Sector Shrinks at Slower Pace

Euro traded at 1.1381 against USD at 9:00 AM PST

The euro area private sector contracted at a slower pace in June as services activity posted a slower fall, while manufacturing output continued to grow moderately. The flash composite output index registered 49.5 in June, up from 48.5 in the previous month. The indicator remained below the neutral mark of 50, signaling a third consecutive fall in business activity. Nonetheless, the latest fall was the weakest in the current sequence of contractions.

There was a weaker decline in services activity, while manufacturing production increased further. The services Purchasing Managers' Index (CPI) advanced from 47.7 in the previous month to 48.9 in June. Although the manufacturing PMI dropped from 51.6 to 51.3, the above-50 reading still signals expansion.

There was a sustained slump in new orders in the private sector. A renewed increase in manufacturing new orders was insufficient to counteract a further fall in services activity. Inflationary pressures eased in June. Input cost inflation was the slowest since February. In turn, output price inflation slowed in June, albeit to a lesser extent than input costs.

Suppliers' delivery times lengthened in June, and purchasing activity was broadly unchanged from May. Employment dropped only fractionally and to the smallest extent since February. Business confidence improved for the second month straight in June, after dropping to a 31-month low in April. Confidence improved in both the manufacturing and service sectors.

The two largest eurozone economies registered a decline in output. However, the rate of contraction eased in France, while Germany reported the fastest reduction in a year and a half.

Germany's flash composite output index registered 48.0 in June, down from 48.8 in May. The reading was the lowest recorded since December 2024. The latest decrease was centered on the service sector, which recorded its worst performance in over three-and-a-half years in June. The services PMI declined from 48.1 in the prior month to 46.8. At the same time, the factory PMI fell marginally from 50.1 in the previous month to the neutral mark of 50.0 in June. The score was seen at 50.3.

France's private sector contracted for the sixth month straight in June, albeit at a slower pace. The flash composite output index rose from 44.9 in the previous month to 47.6 in June. The pace of contraction slowed sharply from May, with softer declines in output recorded in both the manufacturing and service sectors. The services PMI climbed from 44.3 last month to 47.4. At the same time, factory PMI registered 50.7 compared to 49.7 in May. 06/23/2026 - 08:42:00 (RTTNews)

United Kingdom Private Sector Shrinks for Second Month

British Pound traded at 1.3190 against USD at 9:00 AM PST

The UK private sector contracted for the second month straight in June due to the sustained weakness in the services sector. The flash composite output index dropped from 49.7 in the previous month to a 14-month low of 49.4 in June.

The downturn was caused by the services sector; costs were sharply rising, and lower consumer sentiment dampened activity. The weakness in services was partly offset by an increase in manufacturing output.

The services Purchasing Managers' Index (PMI) hit a 41-month low at 48.7, dropping from 49.3 in May. The score was seen at 50.0. The manufacturing PMI dropped from 53.9 in the previous month to 53.1.

New business volumes declined at the fastest rate in 14 months, leading to a steeper fall in backlogs of work and a trimming of headcounts. Regarding inflationary pressures, input prices continued to rise sharply in June. However, the rate of inflation moderated from April's 41-month high, leading to a slightly softer increase in selling prices. 06/23/2026 - 09:25:00 (RTTNews)

Hong Kong Inflation Climbs to 13-month High

Hong Kong's consumer price inflation accelerated in May to the highest level in just over a year amid higher transport and utility costs. The consumer price index (CPI) climbed 2.0% year-over-year in May, faster than April's stable increase of 1.7%. A similar inflation rate was last seen in April 2025.

Netting out the effects of all governments' one-off relief measures, the underlying inflation rate rose from 1.6% to 1.9%. Inflation based on transportation rose from 4.5% to 5.1% amid higher fuel costs. Utility charges grew at a faster pace of 6.6% versus 5.5% in May.

Food inflation held steady at 0.7%, and clothing and footwear prices logged a renewed increase of 1.0%. Meanwhile, the deflation in durable goods slowed from 1.9% to 1.2%. On a seasonally adjusted basis, the average monthly rate of change in the Composite CPI for the 3-month period ending May was 0.1%. 06/23/2026 - 05:10:00 (RTTNews)

Singapore Inflation Remains Stable at 1.8%

Singapore's consumer price inflation held steady for the second month straight in May. The consumer price index (CPI) climbed 1.8% year-over-year in May, the same as in the previous two months.

The pickup in private transport and accommodation inflation, alongside higher food, retail, and other goods inflation, was largely offset by lower services inflation. Services inflation slowed from 1.5% to 1.3% in May amid a steeper decline in telecommunication services prices.

Meanwhile, the deflation in electricity and gas stayed unchanged at 3.0%, and retail and other goods inflation rose marginally from 1.5% to 1.6%. Food inflation climbed from 1.6% to 1.8% as the prices of non-cooked food and food services rose at a quicker pace. Private transport charges grew at a faster pace of 8.6% versus 8.1% in April due to higher costs for cars and motorcycles. 06/23/2026 - 02:23:00 (RTTNews)