The dollar witnessed a remarkable upward trajectory, surging by nearly 1.5% to approximately 1.0335/E. This evening, the euro recovered slightly to around 1.0415, marking a -0.6% decline. This validates the break of the significant support level of 1.0465, not only at the beginning of October 2023 but especially at the end of November 2022. A string of poor Eurozone statistics acted as a trigger for the single currency's fall against all currencies. Notably, there was an unexpectedly large drop in PMI figures.Impact on the $-Index
The $-Index soared by +1.1% to reach 108.07 before easing to 107.50, representing a +0.5% increase. This marks its best close since November 6, 2022. Surprisingly, the Swiss franc emerged as the weakest currency, with a -0.8% decline against the dollar and a -0.3% drop against the euro.ECB's Interest Rate Speculation
The Euro's fall was prompted by speculation that the European Central Bank (ECB) would cut its key interest rates by 50 basis points following the publication of the HCOB flash composite PMI index for overall activity in the eurozone in October. It fell from 50 to 48.1 in November, highlighting the sharpest contraction in overall activity since January. The PMI Flash HCOB index for'services' activity dropped from 51.6 to 49.2, reaching a 10-month low. Similarly, the manufacturing production index fell from 45.8 to 45.1.In France, the PMI Flash HCOB composite index of overall activity also experienced a significant decline in November. It fell from 48.1 in October to 44.8 in the current month, indicating the sharpest deterioration in private sector business conditions since January. The PMI Flash HCOB index of services activity in France decreased by -3.5 points to 45.7 in November, hitting a 10-month low. The PMI Flash index of manufacturing production in France also fell by -2.4 points to 40.7, reaching an 11-month low.The sharpest slowdown was observed in Germany, while Spain fared relatively better.US Private Sector Growth
On the other side of the world, US private sector growth accelerated in November. According to S&P Global's composite PMI, it rose to a 31-month high of 55.3 in flash estimates, following 54.1 in final estimates for the previous month. Business production expectations for the coming year reached their highest level since May 2022, driven by the prospect of lower interest rates, improved economic growth, and a more pro-business administration.Copyright (c) 2024 CercleFinance.com. All rights reserved.
