Euro's Ascent Pauses

London: 15 December 2023 (TraderMade): The Euro's ascent took a breather on Friday, its November peak proving a mirage in the face of underwhelming Eurozone PMI data. Whispers of doubt about the European Central Bank's (ECB) hawkish stance began to flicker, fueled by contracting activity in the services and manufacturing sectors.

Eurozone PMI Highlights

Eurozone business activity sputtered in December, dashing hopes for a modest recovery. Services activity nosedived (48.1 vs. expected 49), while manufacturing remained stagnant (44.2 vs. expected 44.6). This makes the Eurozone's economic outlook and the ECB's hawkish stance on interest rates uncertain. Lagarde's promises just yesterday seem increasingly shaky in the face of this gloomy reality.

Across the Atlantic, the US Dollar remained sluggish, weighed down by the growing conviction that the Federal Reserve will be the first major central bank to hit the brakes on rate hikes, potentially paving the way for cuts. Later today's S&P Global PMIs and the NY Empire State Manufacturing Index could further solidify the narrative of a soft landing for the US economy, adding to the Greenback's woes.

Market Movers

• Euro's rally stumbles on disappointing Eurozone PMI data.
• German and French PMI figures foreshadow a weak overall Eurozone reading.
• Manufacturing remains mired in contraction at 44.2, and services activity dips to 48.1.
• The ECB's hawkish stance faces scrutiny as the Eurozone economy falters.
• USD stuck in recent lows, pressured by dovish Fed expectations.