Euro Wobbles as US Data Boosts Dollar, Pound Sterling Finds Support
London: 2 April 2024 (TraderMade): European economic data painted a mixed picture, leaving the Euro (EUR) struggling for direction. Here's the breakdown:
EURUSD plummeted 0.28% to 1.07594.
GBPUSD dipped 0.495% to 1.25595.
EURGBP surged 0.21% to 0.85669.
Live rates at about 01:33 PM GMT compared to Thursday, 28 March Close.
Key Takeaways
- US Shines: Strong US manufacturing data and hawkish Fed comments lifted the US Dollar (USD) against most currencies. This scenario, in turn, weighed on the Euro.
- Eurozone Falters: Despite a slight improvement in Eurozone manufacturing PMI, it remained below the growth threshold (50), contrasting with the US sector's expansion.
- German Inflation Cools: German inflation eased further in March, but core inflation remains elevated, offering little room for immediate interest rate cuts by the ECB.
Pound Sterling (GBP) Finds Footing
Meanwhile, the Pound (GBP) gained some support from a surprise rebound in UK manufacturing PMI, which returned to growth territory for the first time since 2022. This positive development, however, was countered by weaker-than-expected UK shop price inflation.
Interest Rate Outlook Key
The similar stances of the ECB and BoE on potential interest rate cuts in June are keeping the Euro and Pound in a holding pattern. However, the stronger US economic data and the Fed's hawkish tone could continue to favor the Dollar in the near term.
Stay Tuned
Investors will be closely watching upcoming US jobs data and further ECB pronouncements on rate cuts, which could spark fresh volatility in currency markets.
