EUR/USD is stabilizing near 1.1480 on Wednesday, breaking a five-day losing streak as economic data from the US has led investors to become less certain about a potential rate cut by the Federal Reserve in the upcoming December meeting. As of the current moment, the pair is trading steady at 1.1484.
The EUR/USD remains unchanged following robust US ADP and ISM data, with the likelihood of a December Fed rate cut now at 62%. DXY remains stable at 100.18; Scotiabank cautions that a decline below 100 may prolong the USD recovery. The Eurozone Composite PMI experiences its most rapid growth since May 2023, driven primarily by Spain and Germany.
> The Euro has paused its five-day decline, buoyed by positive Eurozone PMIs and strong US economic data : During the North American session, sentiment showed improvement, leading to the Euro reducing its earlier losses, even in the face of positive economic data from the US. Market participants started to reduce the likelihood of a rate cut following the ADP National Employment Change report, which indicated that companies added more jobs than anticipated. Additional data indicated that business activity within the services sector showed improvement. According to data, the probability of a 25-basis-point rate cut stands at 62%, a decrease from 68% prior to the ADP’s announcement. As a result, the US Dollar Index, which monitors the value of the dollar against a selection of six currencies, held firm at 100.18 for the second consecutive day. Expertsobserved, “A push through the low 100 level would suggest that the general USD rebound is likely to extend, potentially quite significantly over the next few weeks.” In Europe, the economy demonstrated significant growth in October, marking its most rapid expansion since May 2023, as indicated by the HCOB Eurozone Composite Purchasing Managers’ Index. Spain outperformed other nations in the Euro area, while the German economy demonstrated unexpected resilience, reaching its peak in nearly two and a half years.
Latest FX Rate Trends : Euro shows signs of recovery following positive PMI data
- The Institute for Supply Management has indicated that the US services sector experienced an uptick in activity during October, as evidenced by the Services PMI increasing to 52.4 from 50 in September, surpassing projections. The Prices Paid index surged to 70—the peak level since October 2022—indicating a resurgence of inflationary pressures.
- The ADP National Employment Report indicated that private payrolls rose by 42,000 in October, exceeding projections of 25,000 and recovering from the downwardly adjusted loss of 29,000 jobs in September.
- Reports says that “The US Supreme Court appeared skeptical of President Donald Trump’s sweeping global tariffs as key justices suggested he had overstepped his authority with his signature economic policy.”
- Three members of the Supreme Court scrutinized Trump’s application of an emergency-powers statute to amass tens of billions of US Dollars in tariffs monthly.
- “A decision against Trump could force more than $100 billion in refunds, remove a major burden on the US importers that are paying the tariffs, and blunt an all-purpose cudgel the president has wielded against trading partners,” as per reports.
- Federal Reserve officials expressed divergent perspectives in light of the most recent data. Governor Stephen Miran acknowledged the robust ADP employment figures but asserted that interest rates ought to be reduced. Chicago Fed President Austan Goolsbee stated that inflationary pressures continue to be persistent, while Fed Governor Lisa Cook observed that the labor market is exhibiting signs of vulnerability.
- The Eurozone HCOB Services Final PMI for October registered at 53, surpassing expectations and the previous month’s figure of 52.6. The HCOB Composite Final PMI for the same period increased to 52.5, surpassing estimates and the previous month’s figure of 52.2.