The euro weakened against the dollar, reaching its lowest point since early November. This movement is attributed to a combination of factors: the latest Purchasing Managers’ Index (PMI) data, dovish comments from a Federal Reserve official fueling expectations of lower US interest rates, and reports of potential progress towards a Ukraine peace plan. While Eurozone private-sector activity showed solid growth, it was slightly below the previous month’s peak.
- The euro slipped to $1.15, the weakest level since early November.
- Dovish signals from a Federal Reserve official raised expectations for lower US interest rates.
- Eurozone private-sector activity grew robustly in November, slightly below October’s more than two-year high.
- The European Commission upgraded its Eurozone growth forecast for 2025 to 1.3% from 0.9%.
- Reports suggest potential progress toward a Ukraine peace plan, requiring Kyiv to cede the Donbas region and scale down its military.
The combination of external factors and internal economic conditions creates a complex outlook for the euro. While Eurozone growth forecasts have been revised upward, the prospect of lower US interest rates and potential geopolitical shifts are placing downward pressure on the currency. This situation suggests continued volatility for the euro in the near future, requiring careful monitoring of both economic indicators and international developments.