By Saikat Chatterjee
    LONDON, June 23 (Reuters) - The euro weakened broadly on
Thursday as disappointing German and French PMI data confirmed
the euro zone economy is struggling to gain traction, prompting
traders to trim bets on big interest rate hikes from the
European Central Bank.
    High prices in the euro zone meant demand for manufactured
goods fell in June at the fastest rate since May 2020 when the
coronavirus pandemic was taking hold, with S&P Global's headline
factory Purchasing Managers' Index (PMI) falling to a near two- 
  year low of 52.0 from 54.6.  urn:newsml:reuters.com:*:nL4N2YA0J8
    "The PMIs were certainly not so strong as anticipated," said
Stuart Cole, head macro economist at Equiti Capital in London.
    "The ECB, therefore, will take note of today's numbers, but
will look for evidence that the picture they are painting is
being played out in the hard data before changing tack."
    Following the data, money markets were pricing in about 30
basis points (bps) of rate hikes in July compared to 34 bps on
Monday. Traders also trimmed their expectations of how much the
ECB will hike rates by the end of 2022 to 161 bps compared to
176 bps on Monday.
    Against the U.S. dollar, the single currency  EUR=EBS 
declined 0.6% to $1.0498, falling below the $1.05 line for the
third time this week. The euro declined more than 1% versus the
Japanese yen   EURJPY=EBS 
    The euro's losses pulled the dollar away from earlier lows
and sent the greenback into positive territory against its
rivals after cautious comments by Federal Reserve Chair Jerome
Powell on Wednesday weighed on sentiment.
    While markets have steadfastly held to the view the Fed is
on track to raise interest rates by another hefty 75 bps in
July, some analysts believe the ECB and the Bank of England will
adopt a softer rate increase path or risk damaging growth.
    Fed Chair Jerome Powell said on Wednesday a recession was
"certainly a possibility," reflecting fears in financial markets
that the Fed's tightening pace will throttle growth.
 urn:newsml:reuters.com:*:nL1N2YA07V Powell testifies to the House later in the day.
    The Norwegian crown also failed to get a boost after
Norway's central bank raised its benchmark interest rates by 50
bps on Thursday, its largest single hike since 2002 and twice as
much as expected by most economists.  urn:newsml:reuters.com:*:nL8N2YA1P6
    The crown briefly rose against the dollar after the rate
announcement but then retreated as the dollar gained strength
broadly against major currencies. The crown was last down 0.6%
versus the dollar and was virtually flat against the euro
 NOK=D3   EURNOK=D3 .

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World FX rates    https://tmsnrt.rs/2RBWI5E
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 (Reporting by Saikat Chatterjee; Editing by Kim Coghill and
Susan Fenton)
 ((saikat.chatterjee@thomsonreuters.com; +44-20-7542-1713;
Reuters Messaging: saikat.chatterjee.reuters.com@reuters.net))