EUR/USD is attempting a mild rebound on Friday, trading near 1.1535 at the time of writing, yet it remains close to the recent two-week low around 1.1500. Softer-than-expected preliminary business activity data from the Eurozone and Germany have dampened investor sentiment, limiting the euro’s recovery.
The Eurozone’s HCOB Manufacturing PMI slipped back into contraction territory, falling to 49.7 in November from 50.0 in October, missing expectations for a rise to 50.2. The Services PMI also edged lower to 52.4, below market forecasts for an unchanged 52.5.
Germany’s figures echoed this weakness. Manufacturing activity deteriorated further, dropping to 48.4 from 49.6, while the Services PMI eased sharply to 52.7 from 54.6, missing the expected 53.9 reading.
Meanwhile, the US Dollar has held a firm tone throughout the week as markets increasingly accept that the Federal Reserve may wait longer before delivering additional policy easing. Minutes from the October FOMC meeting highlighted divisions among policymakers, while September’s Nonfarm Payrolls failed to provide clarity on the likely outcome of the December meeting.
Later today, speeches from ECB officials Luis de Guindos, Joachim Nagel, and José Luis Escrivá will be in focus. In the US session, the S&P Global preliminary PMIs and the University of Michigan Consumer Sentiment Index, alongside comments from multiple Fed speakers, will shape USD direction.
Daily Market Highlights: Euro rebound loses momentum
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US Dollar remains supported, with traders scaling back expectations of a December Fed rate cut. At the same time, the euro’s recovery attempt is faltering after disappointing German and Eurozone PMI data.
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Earlier, ECB President Christine Lagarde reiterated that a stronger euro could push inflation lower and confirmed the bank’s readiness to adjust policy if needed.
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In the US, Manufacturing PMI is expected to ease slightly to 52.0 for November from 52.5, while Services PMI is seen holding steady at 54.8.
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The Michigan Consumer Sentiment Index is forecast to inch up to 50.5 from 50.3, with 12-month and 5-year inflation expectations remaining unchanged at 4.7% and 3.6%, respectively.
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On Thursday, Nonfarm Payrolls surprised to the upside, rising by 119K in September versus the 50K consensus. However, the unemployment rate unexpectedly ticked up to 4.4% from 4.3%, tempering market optimism.
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In the Eurozone, the European Commission’s Consumer Confidence Index held steady at -14.2 in November, slightly below expectations for an improvement to -14.0.
