The euro traded around $1.16 as investors processed Eurozone PMI data and anticipated the release of US inflation figures. Eurozone private sector growth accelerated to its fastest pace since May, driven by strong services and a more stable manufacturing sector. Market participants also monitored developments related to US-China trade relations.
- The euro hovered around $1.16.
- The October Eurozone PMI showed the private sector growing at its fastest pace since May 2024.
- Growth was driven by robust services activity and stabilizing manufacturing.
- Germany hit a 29-month growth high.
- The rest of the euro area expanded rapidly.
- France posted its 14th consecutive monthly decline.
- Investors awaited US inflation figures.
- US inflation is expected to accelerate for a second month.
- Markets almost fully price in a 25bps rate cut at the Federal Reserve’s meeting next week.
- US President Donald Trump will meet Chinese President Xi Jinping next week.
The information suggests a complex environment for the euro. Positive economic data from Germany and the Eurozone as a whole could support the currency. However, persistent weakness in France and the anticipation of rising US inflation, coupled with a potential Federal Reserve rate cut, present headwinds. The upcoming meeting between the US and Chinese presidents may also influence investor sentiment towards the euro, depending on the progress made in resolving trade tensions.